AN ACT relating to municipal obligations; requiring the
governing body of a local government that authorizes a medium-term obligation
to include certain information in the resolution authorizing the obligation and
to amend its plan for capital improvement under certain circumstances;
eliminating the exception for medium-term obligations from the limitation on
the amount that certain local governments may receive from taxes ad valorem;
ratifying the approval of the issuance of certain medium-term obligations by
the board of trustees of the Pahrump Community Library District; and providing
other matters properly relating thereto.

[Approved May 11, 1999]

THE PEOPLE OF
THE STATE OF NEVADA, REPRESENTED IN SENATE AND ASSEMBLY, DO ENACT AS FOLLOWS:

Section
1. NRS 350.001 is hereby amended to read as follows:

350.001As
used in NRS 350.001 to 350.006, inclusive, unless the context otherwise
requires:

2. “General obligation debt”
means debt which is legally payable from general revenues, as a primary or
secondary source of repayment, and is backed by the full faith and credit of a
governmental entity. The term includes debt represented by local government
securities issued pursuant to this chapter except debt created for medium-term
obligations pursuant to NRS [350.089] 350.085 to 350.095, inclusive.

350.0871.
If the public interest requires a medium-term obligation, the governing body
of any local government, by a resolution adopted by two-thirds of its members,
may authorize a medium-term obligation. For the purposes of the issuance of a
medium‑term obligation pursuant to NRS 280.266, a metropolitan police
committee on fiscal affairs shall be deemed the governing body of a local
government.

2. The resolution must
contain:

(a) A finding by the governing
body that the public interest requires the medium-term obligation; [and]

(b) A statement of the facts
upon which the finding required
pursuant to paragraph (a) is based[.] ; and

(c) A statement that identifies:

(1) Each source of revenue of the local government
that is anticipated to be used to repay the medium-term obligation; and

(2) The dollar amount that is anticipated to be
available to repay the medium-term obligation from each such source.

3. Except as otherwise
provided in subsection 4, before the adoption of any such resolution, the
governing bodyshall
publish notice of its intention to act thereon in a newspaper of general
circulation for at least one publication. No vote may be taken upon the
resolution until 10 days after the publication of the
notice.

of the notice. The cost of
publication of the notice required of an entity is a proper charge against its
general fund.

4. If such a resolution will
be adopted by a metropolitan police committee on fiscal affairs, the sheriff of
the county in which the metropolitan police department is located shall publish
the notice required pursuant to subsection 3.

Sec.
3. NRS 350.089 is hereby amended to read as follows:

350.089Except
as otherwise provided in NRS 280.266 and 496.155:

1. Upon the adoption of a
resolution for a medium-term obligation, as provided in NRS 350.087, by a local
government, a certified copy thereof must be forwarded to the executive
director of the department of taxation. As soon as is practicable, the
executive director of the department of taxation shall, after consideration of
the tax structure of the local government concerned , [and]
the probable ability of the local government to repay the requested medium-term
obligation[,] and the compliance of the local
government with the applicable provisions of law, including, without
limitation, the provisions of chapter 354 of NRS, approve or
disapprove the resolution in writing to the governing board. No such resolution
is effective until approved by the executive director of the department of
taxation. The written approval of the executive director of the department of
taxation must be recorded in the minutes of the governing board.

2. If the executive director
of the department of taxation does not approve the resolution for the
medium-term obligation, the governing board of the local government may appeal
the executive director’s decision to the Nevada tax commission.

Sec.
4. NRS 350.091 is hereby amended to read as follows:

350.0911.
Whenever the governing body of any local government is authorized to enter
into a medium-term obligation as provided in NRS 280.266 or 350.089, the
governing body [may] :

(a) If the medium-term obligation is intended to finance
a capital project, shall update its plan for capital improvement in the same
manner as is required for general obligation debt pursuant to NRS 350.0035.

(b) May issue, as evidence thereof,
negotiable notes, leases, other evidence of a transaction described in NRS
350.800, or short-time negotiable bonds.

2. Except as otherwise
provided in subsection 5 of NRS 496.155, the negotiable notes or bonds:

(a) Must mature not later than
10 years after the date of issuance.

(b) Must bear interest at a
rate or rates which do not exceed by more than 3 percent the Index of Twenty
Bonds which was most recently published before the bids are received or a
negotiated offer is accepted.

(c) May, at the option of the
local government, contain a provision which allows redemption of the notes or
bonds before maturity, upon such terms as the governing body determines.

3. If the maximum term of the
financing is more than 5 years, the term may not exceed the estimated useful
life of the asset to be purchased with the proceeds from the financing.

350.0931.
After a medium-term obligation has been authorized as provided in NRS 350.089
and if, in the judgment of the governing board of the local government, the
fiscal affairs of the local government can be carried on without impairment and
there is sufficient money in the general fund or a surplus in any other fund,
with the exception of the bond interest and redemption fund, of the local
government, the governing board may transfer from the general fund or from the
surplus appearing in any fund, with the exception of the bond interest and
redemption fund, money sufficient to meet the purpose of the medium-term
obligation.

2. When such a transfer is
made, the governing board of the local government shall comply with the
provisions of NRS 350.095, and when the special tax is thereafter collected,
the amount so collected must be placed immediately in the fund from which the
loan was made.

3. In cases where the fund
from which the loan was made, at the time of the transfer of funds therefrom,
contains a surplus that in the judgment of the executive director of the
department of taxation is or will not be needed for the purposes of the fund in
the ordinary course of events, the special tax need not be levied, collected
and placed in the fund from which the loan was made, but the transfer shall be
deemed refunded for all purposes of NRS [350.089] 350.085 to 350.095,
inclusive.

Sec.
6. NRS 354.535 is hereby amended to read as follows:

354.535“General
long-term debt” means debt which is legally payable from general revenues and
is backed by the full faith and credit of a governmental unit. The term
includes debt represented by local government securities issued pursuant to
chapter 350 of NRS and debt created for medium-term obligations pursuant to NRS
[350.089] 350.085 to 350.095, inclusive.

Sec.
7. NRS 354.59811 is hereby amended to read as follows:

354.598111. Except as otherwise
provided in NRS [350.087,] 354.59813, 354.59815,
354.5982, 354.5987, 354.59871, 354.705, 450.425, 540A.265 and 543.600, for each
fiscal year beginning on or after July 1, 1989, the maximum amount of money
that a local government, except a school district, a district to provide a
telephone number for emergencies, or a redevelopment agency, may receive from
taxes ad valorem, other than those attributable to the net proceeds of minerals
or those levied for the payment of bonded indebtedness and interest thereon
incurred as [a general or medium-term obligation]general long-term debt of
the issuer, or for the payment of obligations issued to pay the cost of a water
project pursuant to NRS 349.950, or for the payment of obligations under a
capital lease executed before April 30, 1981, must be calculated as follows:

[1.] (a) The rate must be set
so that when applied to the current fiscal year’s assessed valuation of all
property which was on the preceding fiscal year’s assessment roll, together
with the assessed valuation of property on the central assessment roll which
was allocated to the local government, but excluding any assessed valuation
attributable to the net proceeds of minerals, assessed valuation attributable
to a redevelopment area and assessed valuation of a fire protection district
attributable to real property which is transferred from private ownership to
public ownership for the purpose of conservation, it will
produce 106 percent of the maximum revenue allowable from taxes ad valorem for
the preceding fiscal year, except that the rate so determined must not be less
than the rate allowed for the previous fiscal year, except for any decrease
attributable to the imposition of a tax pursuant to NRS 354.59813 in the
previous year.

conservation, it will produce 106
percent of the maximum revenue allowable from taxes ad valorem for the
preceding fiscal year, except that the rate so determined must not be less than
the rate allowed for the previous fiscal year, except for any decrease
attributable to the imposition of a tax pursuant to NRS 354.59813 in the
previous year.

[2.] (b) This rate must then
be applied to the total assessed valuation, excluding the assessed valuation
attributable to the net proceeds of minerals and the assessed valuation of a
fire protection district attributable to real property which is transferred
from private ownership to public ownership for the purpose of conservation but
including new real property, possessory interests and mobile homes, for the
current fiscal year to determine the allowed revenue from taxes ad valorem for
the local government.

2. As used in this section, “general long-term debt”
does not include debt created for medium-term obligations pursuant to NRS
350.085 to 350.095, inclusive.

Sec.
8. NRS 555.215 is hereby amended to read as follows:

555.2151.
Upon the preparation and approval of a budget in the manner required by the
Local Government Budget Act, the board of county commissioners of each county
having lands situated in the district shall, by resolution, levy an assessment
upon all real property in the county which is in the weed control district.

2. Every assessment so levied
is a lien against the property assessed.

3. Amounts collected in
counties other than the county having the larger or largest proportion of the
area of the district must be paid over to the board of county commissioners of
that county for the use of the district.

4. The county commissioners
of that county may obtain medium-term obligations pursuant to NRS [350.089] 350.085 to 350.095,
inclusive, of an amount of money not to exceed the total amount of the
assessment, to pay the expenses of controlling the weeds in the weed control
district. The loans may be made only after the assessments are levied.

Sec.
9. 1. The actions of the board of trustees of the Pahrump Community
Library District in adopting Resolution No. 98-01 approving the issuance of
medium-term obligations for the construction and furnishing of a new building
for the District in an amount not to exceed $3,000,000 that would be repaid
over a 10-year period by levying an ad valorem tax of .1046 per $100 of assessed
valuation of taxable property within the District in accordance with the
provisions of NRS 350.095 are hereby ratified, validated, approved and
confirmed.

2.
The amendatory provisions of sections 1 to 8, inclusive, of this act do not
apply to the obligations described in subsection 1.

Sec.
10. This act becomes effective upon passage and approval.

________

…………………………………………………………………………………………………………………

ê1999 Statutes
of Nevada, Page 279ê

CHAPTER 102, AB 55

Assembly
Bill No. 55–Assemblyman Collins

CHAPTER 102

AN ACT relating to scrap metal; prohibiting the burning
of stolen metallic wire to remove insulation; requiring junk dealers to obtain
certain information before purchasing or receiving certain metallic wire from
another person; requiring junk dealers to retain such information for a certain
period; providing penalties; and providing other matters properly relating
thereto.

[Approved May 11, 1999]

THE PEOPLE OF
THE STATE OF NEVADA, REPRESENTED IN SENATE AND ASSEMBLY, DO ENACT AS FOLLOWS:

Section
1.NRS 202.180 is hereby amended to read as follows:

202.1801. Every
person who:

[1.] (a) Shall deposit, leave
or keep, on or near a highway or route of public travel, on land or water, any
unwholesome substance;

[2.] (b) Shall establish,
maintain or carry on, upon or near a highway or route of public travel, on land
or water, any business, trade or manufacture which is detrimental to the public
health; [or

3.] (c) Shall deposit or cast
into any lake, creek or river, wholly or partly in this state, the offal from
or the dead body of any animal; or

(d) Shall knowingly burn stolen
metallic wire to remove insulation,

shall be
guilty of a gross misdemeanor.

2. As used in this section, “stolen
metallic wire” means metallic wire that has been taken unlawfully from or
without the permission of the owner, whether or not the person who took the
metallic wire is or has been prosecuted or convicted for taking the metallic
wire.

Sec.
2. Chapter 647 of NRS is hereby amended by adding thereto a new section to
read as follows:

1. A junk dealer shall not purchase or
otherwise receive metallic wire that has been burned in whole or in part to
remove insulation unless, at the time that the metallic wire is purchased or
otherwise received, the junk dealer obtains:

(a) Written evidence identifying the
person who delivered the metallic wire; and

(b) A statement signed by the person
who delivered the metallic wire in which the person attests that the metallic
wire was lawfully acquired and burned.

2. A junk dealer shall retain the
written evidence and the statement obtained pursuant to subsection 1 for not
less than 3 years.

Sec.
3. NRS 647.030 is hereby amended to read as follows:

647.0301. Every junk dealer shall keep a book in which must be
written in ink at the time of purchase a full and accurate description of each
article purchased, together with the full name, residence, driver’s license
number, vehicle license number and general description of the person selling
the article.

2. In addition to the information
required to be included in the book pursuant to subsection 1, a junk dealer
must include in writing in ink in the book
each time he purchases or otherwise receives metallic wire that has been burned
in whole or in part to remove insulation:

book each time he purchases or otherwise
receives metallic wire that has been burned in whole or in part to remove
insulation:

(a) The name of the person who
delivered the metallic wire; and

(b) A description of the written
evidence obtained by the junk dealer pursuant to section 2 of this act
identifying the person who delivered the metallic wire.

3. No entry in the
book may be erased, mutilated or changed.

[2.] 4. The book must be open
at all times to inspection by the sheriff of the county or any of his deputies,
any member of the police department in the city or town, and any constable or
other county or municipal officer in the county in which the junk dealer does
business.

Sec. 4.
NRS 647.135 is hereby amended to read as follows:

647.135 Any
junk dealer who violates any of the provisions of NRS 647.020 to 647.070,
inclusive, or section 2 of this
act is guilty of a misdemeanor.

Sec.
5. The amendatory provisions of this act do not apply to offenses that are
committed before October 1, 1999.

________

CHAPTER 103, SB 277

Senate
Bill No. 277–Committee on Finance

CHAPTER 103

AN ACT making supplemental appropriations to the
Department of Museums, Library and Arts for the administration of the
Department, to offset unanticipated shortfalls in the revenue from admissions
at certain museums and for additional utility expenses; and providing other
matters properly relating thereto.

[Approved May 11, 1999]

THE PEOPLE OF
THE STATE OF NEVADA, REPRESENTED IN SENATE AND ASSEMBLY, DO ENACT AS FOLLOWS:

Section
1. 1. There is hereby appropriated from the state general fund to the
Department of Museums, Library and Arts the sum of $1,550 for additional
anticipated expenses for the administration of the Department. This
appropriation is supplemental to that made by section 18 of chapter 244,
Statutes of Nevada 1997, at page 856.

2.
Any remaining balance of the supplemental appropriation made by subsection 1
must not be committed for expenditure after June 30, 1999, and reverts to the
state general fund as soon as all payments of money committed have been made.

Sec.
2. 1. There is hereby appropriated from the state general fund to the
Department of Museums, Library and Arts the sum of $10,000 to offset the
unanticipated shortfall in the revenue from admissions at the Nevada Museum and
Historical Society in Las Vegas. This appropriation is supplemental to that
made by section 18 of chapter 244, Statutes of Nevada 1997, at page 856.

2.
Any remaining balance of the supplemental appropriation made by subsection 1
must not be committed for expenditure after June 30, 1999, and reverts to the
state general fund as soon as all payments of money committed have been made.

Sec.
3. 1. There is hereby appropriated from the state general fund to the
Department of Museums, Library and Arts the sum of $8,769 to offset the
unanticipated shortfall in the revenue from admissions at the Nevada State
Railroad Museum in Carson City and for additional utility expenses at that
museum. This appropriation is supplemental to that made by section 18 of
chapter 244, Statutes of Nevada 1997, at page 856.

2.
Any remaining balance of the supplemental appropriation made by subsection 1
must not be committed for expenditure after June 30, 1999, and reverts to the
state general fund as soon as all payments of money committed have been made.

Sec.
4. 1. There is hereby appropriated from the state general fund to the
Department of Museums, Library and Arts the sum of $15,145 for additional
utility expenses at the Nevada State Museum in Carson City. This appropriation
is supplemental to that made by section 18 of chapter 244, Statutes of Nevada
1997, at page 856.

2.
Any remaining balance of the supplemental appropriation made by subsection 1
must not be committed for expenditure after June 30, 1999, and reverts to the
state general fund as soon as all payments of money committed have been made.

THE PEOPLE OF
THE STATE OF NEVADA, REPRESENTED IN SENATE AND ASSEMBLY, DO ENACT AS FOLLOWS:

Section
1.Chapter 104 of NRS is hereby amended by adding thereto the
provisions set forth as sections 2 to 135, inclusive, of this act.

Sec. 2. This article may be cited as Uniform
Commercial Code–Secured Transactions.

Sec. 3. 1. In this article:

(a) “Accession” means goods that are physically united
with other goods in such a manner that the identity of the original goods is
not lost.

(b) “Account,” except as used in “account for,” means a
right to payment of a monetary obligation, whether or not earned by
performance; for property that has been or is to be sold, leased, licensed,
assigned, or otherwise disposed of; for services rendered or to be rendered;
for a policy of insurance issued or to be issued; for a secondary obligation
incurred or to be incurred; for energy provided or to be provided; for the use
or hire of a vessel under a charter or
other contract; arising out of the use of a credit or charge card or
information contained on or for use with the card; or as winnings in a lottery
or other game of chance operated or sponsored by a state, governmental unit of
a state, or person licensed or authorized to operate the game by a state or
governmental unit of a state.

a vessel under a charter or other contract; arising out of
the use of a credit or charge card or information contained on or for use with
the card; or as winnings in a lottery or other game of chance operated or
sponsored by a state, governmental unit of a state, or person licensed or
authorized to operate the game by a state or governmental unit of a state. The
term includes health-care-insurance receivables. The term does not include
rights to payment evidenced by chattel paper or an instrument; commercial tort
claims; deposit accounts; investment property; letter-of-credit rights or
letters of credit; or rights to payment for money or funds advanced or sold,
other than rights arising out of the use of a credit or charge card or
information contained on or for use with the card.

(c) “Account debtor” means a person obligated on an
account, chattel paper, or general intangible. The term does not include
persons obligated to pay a negotiable instrument, even if the instrument
constitutes part of chattel paper.

(d) “Accounting,” except as used in “accounting for,”
means a record:

(1) Authenticated by a secured party;

(2) Indicating the aggregate unpaid secured
obligations as of a date not more than 35 days earlier or 35 days later than
the date of the record; and

(3) Identifying the components of the obligations
in reasonable detail.

(e) “Agricultural lien” means an interest, other than a
security interest, in farm products:

(1) Which secures payment or performance of an
obligation for:

(I) Goods or services furnished in connection
with a debtor’s farming operation; or

(II) Rent on real property leased by a debtor
in connection with its farming operation;

(2) Which is created by statute in favor of a
person that:

(I) In the ordinary course of its business
furnished goods or services to a debtor in connection with his farming
operation; or

(II) Leased real property to a debtor in
connection with his farming operation; and

(3) Whose effectiveness does not depend on the
person’s possession of the personal property.

(f) “As-extracted collateral” means:

(1) Oil, gas, or other minerals that are subject to
a security interest that:

(I) Is created by a debtor having an interest
in the minerals before extraction; and

(II) Attaches to the minerals as extracted; or

(2) Accounts arising out of the sale at the
wellhead or minehead of oil, gas, or other minerals in which the debtor had an
interest before extraction.

(g) “Authenticate” means:

(1) To sign; or

(2) To execute or otherwise adopt a symbol, or
encrypt or similarly process a record in whole or in part, with the present
intent of the authenticating person to identify himself and adopt or accept a
record.

(j) “Certificate of title” means a certificate of title
with respect to which a statute provides for the security interest in question
to be indicated on the certificate as a condition or result of the security
interest’s obtaining priority over the rights of a lien creditor with respect
to the collateral.

(k) “Chattel paper” means a record or records that
evidence both a monetary obligation and a security interest in or a lease of
specific goods or of specific goods and software used in the goods. The term
does not include charters or other contracts involving the use or hire of a
vessel. If a transaction is evidenced both by a security agreement or lease and
by an instrument or series of instruments, the group of records taken together
constitutes chattel paper.

(l) “Collateral” means the property subject to a
security interest or agricultural lien. The term includes:

(1) Proceeds to which a security interest attaches;

(2) Accounts, chattel paper, payment intangibles,
and promissory notes that have been sold; and

(1) A natural person incurs an obligation primarily
for personal, family, or household purposes; and

(2) A security interest in consumer goods or in
consumer goods and software that is held or acquired primarily for personal,
family, or household purposes secures the obligation.

(y) “Consumer obligor” means an obligor who is a natural
person and who incurred the obligation as part of a transaction entered into
primarily for personal, family, or household purposes.

(z) “Consumer transaction” means a transaction to the
extent that a natural person incurs an obligation primarily for personal,
family, or household purposes; a security interest secures the obligation; and
the collateral is held or acquired primarily for personal, family, or household
purposes. The term includes consumer-goods transactions.

(mm) “Financing statement” means a record or records
composed of an initial financing statement and any filed record relating to the
initial financing statement.

(nn) “Fixture filing” means the filing of a financing
statement covering goods that are or are to become fixtures and satisfying
subsections 1 and 2 of section 74 of this act. The term includes the filing of
a financing statement covering goods of a transmitting utility which are or are
to become fixtures.

(oo) “Fixtures” means goods that have become so related
to particular real property that an interest in them arises under real property
law.

(rr) “Goods” means all things that are movable when a
security interest attaches. The term includes fixtures; standing timber that is
to be cut and removed under a conveyance or contract for sale; the unborn young
of animals; crops grown, growing, or to be grown, even if the crops are
produced on trees, vines, or bushes; and manufactured homes. The term also
includes a computer program embedded in goods and any supporting information
provided in connection with a transaction relating to the program if the
program is associated with the goods in such a manner that it customarily is
considered part of the goods, or by becoming the owner of the goods, a person
acquires a right to use the program in connection with the goods. The term does
not include a computer program embedded in goods that consist solely of the
medium in which the program is embedded. The term also does not include
accounts, chattel paper, commercial tort claims, deposit accounts, documents,
general intangibles, instruments, investment property, letter-of-credit rights,
letters of credit, money, or oil, gas, or other minerals before extraction.

(ss) “Governmental unit” means a subdivision, agency,
department, county, parish, municipality, or other unit of the government of
the United States, a state, or a foreign country. The term includes an
organization having a separate corporate existence if the organization is
eligible to issue debt on which interest is exempt from income taxation under
the laws of the United States.

(tt) “Health-care-insurance receivable” means an
interest in or claim under a policy of insurance which is a right to payment of
a monetary obligation for health-care goods or services provided.

(uu) “Instrument” means a negotiable instrument or any
other writing that evidences a right to the payment of a monetary obligation,
is not itself a security agreement or lease, and is of a type that in ordinary
course of business is transferred by delivery with any necessary endorsement or
assignment. The term does not include investment property, letters of credit,
or writings that evidence a right to payment arising out of the use of a credit
or charge card or information contained on or for use with the card.

(vv) “Inventory” means goods, other than farm products,
which:

(1) Are leased by a person as lessor;

(2) Are held by a person for sale or lease or to be
furnished under a contract of service;

(3) Are furnished by a person under a contract of
service; or

(4) Consist of raw materials, work in process, or
materials used or consumed in a business.

(xx) “Jurisdiction of organization,” with respect to a
registered organization, means the jurisdiction under whose law the
organization is organized.

(yy) “Letter-of-credit right” means a right to payment
or performance under a letter of credit, whether or not the beneficiary has
demanded or is at the time entitled to demand payment or performance. The term
does not include the right of a beneficiary to demand payment or performance
under a letter of credit.

(zz) “Lien creditor” means:

(1) A creditor that has acquired a lien on the
property involved by attachment, levy, or the like;

(2) An assignee for benefit of creditors from the
time of assignment;

(3) A trustee in bankruptcy from the date of the
filing of the petition; or

(4) A receiver in equity from the time of
appointment.

(aaa) “Manufactured home” means a structure,
transportable in one or more sections, which in the traveling mode, is 8 feet
or more in body width or 40 feet or more in body length, or, when erected on
site, is 320 or more square feet, and which is built on a permanent chassis and
designed to be used as a dwelling with or without a permanent foundation when
connected to the required utilities, and includes the plumbing, heating,
air-conditioning, and electrical systems contained therein. The term includes
any structure that meets all of the requirements of this paragraph except the size
requirements and with respect to which the manufacturer voluntarily files a
certification required by the United States Secretary of Housing and Urban
Development and complies with the standards established under Title 42 of the
United States Code.

(bbb) “Manufactured-home transaction” means a secured
transaction:

(1) That creates a purchase-money security interest
in a manufactured home, other than a manufactured home held as inventory; or

(2) In which a manufactured home, other than a
manufactured home held as inventory, is the primary collateral.

(ccc) “Mortgage” means a consensual interest in real
property, including fixtures, which is created by a mortgage, deed of trust, or
similar transaction.

(ddd) “New debtor” means a person that becomes bound as
debtor under subsection 4 of section 14 of this act by a security agreement
previously entered into by another person.

(eee) “New value” means money; money’s worth in
property, services, or new credit; or release by a transferee of an interest in
property previously transferred to the transferee. The term does not include an
obligation substituted for another obligation.

(fff) “Noncash proceeds” means proceeds other than cash
proceeds.

(ggg) “Obligor” means a person that, with respect to an
obligation secured by a security interest in or an agricultural lien on the
collateral, owes payment or other
performance of the obligation, has provided property other than the collateral
to secure payment or other performance of the obligation, or is otherwise accountable
in whole or in part for payment or other performance of the obligation.

owes payment or other performance of the obligation, has
provided property other than the collateral to secure payment or other
performance of the obligation, or is otherwise accountable in whole or in part
for payment or other performance of the obligation. The term does not include
an issuer or a nominated person under a letter of credit.

(hhh) “Original debtor” means a person that, as debtor,
entered into a security agreement to which a new debtor has become bound under
subsection 4 of section 14 of this act.

(iii) “Payment intangible” means a general intangible
under which the account debtor’s principal obligation is a monetary obligation.

(jjj) “Person related to,” with respect to a natural
person, means:

(1) His spouse;

(2) His brother, brother-in-law, sister, or
sister-in-law;

(3) His or his spouse’s ancestor or lineal
descendant; or

(4) Any other relative, by blood or marriage, of
the person or his spouse who shares the same home with him.

(kkk) “Person related to,” with respect to an
organization, means:

(1) A person directly or indirectly controlling,
controlled by, or under common control with the organization;

(2) An officer or director of, or a person
performing similar functions with respect to, the organization;

(3) An officer or director of, or a person
performing similar functions with respect to, a person described in
subparagraph (1);

(4) The spouse of a natural person described in
subparagraph (1), (2), or (3); or

(5) A person who is related by blood or marriage to
a person described in subparagraph (1), (2), (3), or (4) and shares the same
home with that person.

(lll) “Proceeds” means the following property:

(1) Whatever is acquired upon the sale, lease,
license, exchange, or other disposition of collateral;

(4) To the extent of the value of collateral,
claims arising out of the loss, nonconformity, or interference with the use of,
defects or infringement of rights in, or damage to, the collateral; and

(5) To the extent of the value of collateral and to
the extent payable to the debtor or the secured party, insurance payable by
reason of the loss or nonconformity of, defects or infringement of rights in,
or damage to, the collateral.

(mmm) “Promissory note” means an instrument that
evidences a promise to pay a monetary obligation, does not evidence an order to
pay, and does not contain an acknowledgment by a bank that the bank has
received for deposit a sum of money or funds.

(nnn) “Proposal” means a record authenticated by a
secured party which includes the terms on which the secured party is willing to
accept collateral in full or partial satisfaction of the obligation it secures
pursuant to sections 119, 120 and 121 of this act.

(2) All or a portion of the securities issued have
an initial stated maturity of at least 20 years; and

(3) The debtor, the obligor, the secured party, the
account debtor or other person obligated on collateral, the assignor or
assignee of a secured obligation, or the assignor or assignee of a security
interest is a state or a governmental unit of a state.

(ppp) “Pursuant to commitment,” with respect to an
advance made or other value given by a secured party, means pursuant to the
secured party’s obligation, whether or not a subsequent event of default or
other event not within the secured party’s control has relieved or may relieve
the secured party from its obligation.

(qqq) “Record,” except as used in “for record,” “of
record,” “record or legal title,” and “record owner,” means information that is
inscribed on a tangible medium or which is stored in an electronic or other
medium and is retrievable in perceivable form.

(rrr) “Registered organization” means an organization
organized solely under the law of a single state or the United States and as to
which the state or the United States must maintain a public record showing the
organization to have been organized.

(sss) “Secondary obligor” means an obligor to the extent
that:

(1) The obligor’s obligation is secondary; or

(2) The obligor has a right of recourse with
respect to an obligation secured by collateral against the debtor, another
obligor, or property of either.

(ttt) “Secured party” means:

(1) A person in whose favor a security interest is
created or provided for under a security agreement, whether or not any
obligation to be secured is outstanding;

(2) A person that holds an agricultural lien;

(3) A consignor;

(4) A person to which accounts, chattel paper,
payment intangibles, or promissory notes have been sold;

(5) A trustee, indenture trustee, agent, collateral
agent, or other representative in whose favor a security interest or
agricultural lien is created or provided for; or

(uuu) “Security agreement” means an agreement that creates
or provides for a security interest.

(vvv) “Send,” in connection with a record or
notification, means:

(1) To deposit in the mail, deliver for
transmission, or transmit by any other usual means of communication, with
postage or cost of transmission provided for, addressed to any address
reasonable under the circumstances; or

(2) To cause the record or notification to be
received within the time that it would have been received if properly sent
under subparagraph (1).

(www) “Software” means a computer program and any
supporting information provided in connection with a transaction relating to
the program. The term does not include a computer program that is contained in
goods unless the goods are a computer or computer peripheral.

(xxx) “State” means a state of the United States, the
District of Columbia, Puerto Rico, the United States Virgin Islands, or any
territory or insular possession subject to the jurisdiction of the United
States.

(yyy) “Supporting obligation” means a letter-of-credit
right or secondary obligation that supports the payment or performance of an
account, chattel paper, document, general intangible, instrument, or investment
property.

(zzz) “Tangible chattel paper” means chattel paper
evidenced by a record or records consisting of information that is inscribed on
a tangible medium.

(aaaa) “Termination statement” means a subsequent filing
which:

(1) Identifies, by its file number, the initial
financing statement to which it relates; and

(2) Indicates either that it is a termination
statement or that the identified financing statement is no longer effective.

(bbbb) “Transmitting utility” means a person primarily
engaged in the business of:

3. Article 1 contains general definitions and
principles of construction and interpretation applicable throughout this
article.

Sec. 4. 1. In this section:

(a) “Purchase-money collateral” means goods or software
that secures a purchase-money obligation incurred with respect to that
collateral; and

(b) “Purchase-money obligation” means an obligation of
an obligor incurred as all or part of the price of the collateral or for value
given to enable the debtor to acquire rights in or the use of the collateral if
the value is in fact so used.

2. A security interest in goods is a purchase-money
security interest:

(a) To the extent that the goods are purchase-money
collateral with respect to that security interest;

(b) If the security interest is in inventory that is or
was purchase-money collateral, also to the extent that the security interest
secures a purchase-money obligation incurred with respect to other inventory in
which the secured party holds or held a purchase-money security interest; and

(c) Also to the extent that the security interest
secures a purchase-money obligation incurred with respect to software in which
the secured party holds or held a purchase-money security interest.

3. A security interest in software is a purchase-money
security interest to the extent that the security interest also secures a
purchase-money obligation incurred with respect to goods in which the secured
party holds or held a purchase-money security interest if:

(a) The debtor acquired its interest in the software in
an integrated transaction in which it acquired an interest in the goods; and

(b) The debtor acquired its interest in the software for
the principal purpose of using the software in the goods.

4. The security interest of a consignor in goods that
are the subject of a consignment is a purchase-money security interest in
inventory.

5. In a transaction other than a consumer-goods
transaction, if the extent to which a security interest is a purchase-money
security interest depends on the
application of a payment to a particular obligation, the payment must be
applied:

depends on the application of a payment to a particular
obligation, the payment must be applied:

(a) In accordance with any reasonable method of
application to which the parties agree;

(b) In the absence of the parties’ agreement to a
reasonable method, in accordance with any intention of the obligor manifested
at or before the time of payment; or

(c) In the absence of an agreement to a reasonable
method and a timely manifestation of the obligor’s intention, in the following
order:

(1) To obligations that are not secured; and

(2) If more than one obligation is secured, to
obligations secured by purchase-money security interests in the order in which
those obligations were incurred.

6. In a transaction other than a consumer-goods
transaction, a purchase-money security interest does not lose its status as
such, even if:

(a) The purchase-money collateral also secures an
obligation that is not a purchase-money obligation;

(b) Collateral that is not purchase-money collateral
also secures the purchase-money obligation; or

(c) The purchase-money obligation has been renewed,
refinanced, consolidated, or restructured.

7. In a transaction other than a consumer-goods
transaction, a secured party claiming a purchase-money security interest has
the burden of establishing the extent to which the security interest is a
purchase-money security interest.

8. The limitation of the rules in subsections 5, 6 and
7 to transactions other than consumer-goods transactions leaves to the court
the determination of the proper rules in consumer-goods transactions. The court
may not infer from that limitation the nature of the proper rule in
consumer-goods transactions and may continue to apply established approaches.

Sec.
5. 1. A secured party has
control of a deposit account if:

(a) The secured party is the bank with which the deposit
account is maintained;

(b) The debtor, secured party, and bank have agreed in
an authenticated record that the bank will comply with instructions originated
by the secured party directing disposition of the funds in the account without
further consent by the debtor; or

(c) The secured party becomes the bank’s customer with
respect to the deposit account.

2. A secured party that has satisfied subsection 1 has
control, even if the debtor retains the right to direct the disposition of
funds from the deposit account.

Sec. 6. A secured party has control of
electronic chattel paper if the record or records comprising the chattel paper
are created, stored, and assigned in such a manner that:

1. A single authoritative copy of the record or records
exists which is unique, identifiable and, except as otherwise provided in
subsections 4, 5, and 6, unalterable;

2. The authoritative copy identifies the secured party
as the assignee of the record or records;

3. The authoritative copy is communicated to and maintained
by the secured party or its designated custodian;

4. Copies or revisions that add or change an identified
assignee of the authoritative copy can be made only with the participation of
the secured party;

5. Each copy of the authoritative copy and any copy of
a copy is readily identifiable as a copy that is not the authoritative copy;
and

6. Any revision of the authoritative copy is readily
identifiable as an authorized or unauthorized revision.

Sec. 7. 1. A person has control of a certificated
security, uncertificated security, or security entitlement as provided in NRS
104.8106.

2. A secured party has control of a commodity contract
if:

(a) The secured party is the commodity intermediary with
which the commodity contract is carried; or

(b) The commodity customer, secured party, and commodity
intermediary have agreed that the commodity intermediary will apply any value
distributed on account of the commodity contract as directed by the secured
party without further consent by the commodity customer.

3. A secured party having control of all security
entitlements or commodity contracts carried in a securities account or
commodity account has control over the securities account or commodity account.

Sec. 8. A secured party has control of a
letter-of-credit right to the extent of any right to payment or performance by
the issuer or any nominated person if the issuer or nominated person has
consented to an assignment of proceeds of the letter of credit under subsection
3 of NRS 104.5114 or otherwise applicable law or practice.

Sec. 9. 1. Except as otherwise provided in
subsections 3, 4 and 5, a description of personal or real property is
sufficient, whether or not it is specific, if it reasonably identifies what is
described.

2. Except as otherwise provided in subsection 4, a description
of collateral reasonably identifies the collateral if it identifies the
collateral by:

(a) Specific listing;

(b) Category;

(c) Except as otherwise provided in subsection 5, a type
of collateral defined in the Uniform Commercial Code;

(d) Quantity;

(e) Computational or allocational formula or procedure;
or

(f) Except as otherwise provided in subsection 3, any
other method, if the identity of the collateral is objectively determinable.

3. A description of collateral as “all the debtor’s
assets” or “all the debtor’s personal property” or using words of similar
import does not reasonably identify the collateral.

4. Except as otherwise provided in subsection 5, a
description of a security entitlement, securities account, or commodity account
is sufficient if it describes:

(e) A security interest arising under NRS 104.2401,
104.2505, subsection 3 of NRS 104.2711, or subsection 5 of NRS 104A.2508, as
provided in section 11 of this act; and

(f) A security interest arising under NRS 104.4210 or
104.5118.

2. The application of this article to a security
interest in a secured obligation is not affected by the fact that the
obligation is itself secured by a transaction or interest to which this article
does not apply.

3. This article does not apply to the extent that:

(a) A statute, regulation, or treaty of the United
States preempts this article;

(b) Another statute of this state expressly governs the
creation, perfection, priority, or enforcement of a security interest created
by this state or a governmental unit of this state;

(c) A statute of another state, a foreign country, or a
governmental unit of another state or a foreign country, other than a statute
generally applicable to security interests, expressly governs creation,
perfection, priority, or enforcement of a security interest created by the
state, country, or governmental unit; or

(d) The rights of a transferee beneficiary or nominated
person under a letter of credit are independent and superior under NRS
104.5114.

4. This article does not apply to:

(a) A landlord’s lien, other than an agricultural lien;

(b) A lien, other than an agricultural lien, given by
statute or other rule of law for services or materials, but section 54 of this
act applies with respect to priority of the lien;

(c) An assignment of a claim for wages, salary, or other
compensation of an employee;

(d) A sale of accounts, chattel paper, payment intangibles,
or promissory notes as part of a sale of the business out of which they arose;

(e) An assignment of accounts, chattel paper, payment
intangibles, or promissory notes which is for the purpose of collection only;

(f) An assignment of a right to payment under a contract
to an assignee that is also obligated to perform under the contract;

(g) An assignment of a single account, payment
intangible, or promissory note to an assignee in full or partial satisfaction
of a preexisting indebtedness;

(h) A transfer of an interest in or an assignment of a
claim under a policy of insurance, other than an assignment by or to a
health-care provider of a health-care-insurance receivable and any subsequent
assignment of the right to payment, but sections 36 and 43 of this act apply
with respect to proceeds and priorities in proceeds;

(i) An assignment of a right represented by a judgment,
other than a judgment taken on a right to payment that was collateral;

(j) A right of recoupment or set-off, but:

(1) Section 61 of this act applies with respect to
the effectiveness of rights of recoupment or set-off against deposit accounts;
and

(2) Section 67 of this act applies with respect to
defenses or claims of an account debtor;

(k) The creation or transfer of an interest in or lien
on real property, including a lease or rents thereunder, except to the extent
that provision is made for:

(1) Liens on real property in sections 14 and 29 of
this act;

(2) Fixtures in section 55 of this act;

(3) Fixture filings in sections 73, 74, 84, 88 and
91 of this act; and

(l) An assignment of a claim arising in tort, other than
a commercial tort claim, but sections 36 and 43 of this act apply with respect
to proceeds and priorities in proceeds; or

(m) An assignment of a deposit account in a consumer transaction,
but sections 36 and 43 of this act apply with respect to proceeds and
priorities in proceeds.

Sec. 11. A security interest arising under NRS 104.2401, 104.2505,
subsection 3 of 104.2711, or subsection 5 of NRS 104A.2508 is subject to this
article. However, until the debtor obtains possession of the goods:

1. The security interest is enforceable, even if
paragraph (c) of subsection 2 of section 14 of this act has not been satisfied;

2. Filing is not required to perfect the security
interest;

3. The rights of the secured party after default by the
debtor are governed by Article 2 or 2A; and

4. The security interest has priority over a
conflicting security interest created by the debtor.

Sec. 12. 1. Except as otherwise provided in the Uniform Commercial
Code, a security agreement is effective according to its terms between the
parties, against purchasers of the collateral, and against creditors.

2. A transaction subject to this article is subject to
any applicable rule of law which establishes a different rule for consumers and
to chapters 97 and 97A of NRS.

3. In case of conflict between this article and a rule
of law, statute, or regulation described in subsection 2, the rule of law,
statute, or regulation controls. Failure to comply with a statute or regulation
described in subsection 2 has only the effect the statute or regulation
specifies.

(a) Validate any rate, charge, agreement, or practice
that violates a rule of law, statute, or regulation described in subsection 2;
or

(b) Extend the application of the rule of law, statute,
or regulation to a transaction not otherwise subject to it.

Sec. 13. Except as otherwise provided with respect to consignments
or sales of accounts, chattel paper, payment intangibles, or promissory notes,
the provisions of this article with regard to rights and obligations apply
whether or not title to collateral is in the secured party or the debtor.

Sec. 14. 1. A security interest attaches to
collateral when it becomes enforceable against the debtor with respect to the
collateral, unless an agreement expressly postpones the time of attachment.

2. Except as otherwise provided in subsections 3 to 9,
inclusive, a security interest is enforceable against the debtor and third
parties with respect to the collateral only if:

(a) Value has been given;

(b) The debtor has rights in the collateral or the power
to transfer rights in the collateral to a secured party; and

(c) One of the following conditions is met:

(1) The debtor has authenticated a security
agreement that provides a description of the collateral and, if the security
interest covers timber to be cut, a description of the land concerned;

(2) The collateral is not a certificated security
and is in the possession of the secured party under section 34 of this act
pursuant to the debtor’s security agreement;

(3) The collateral is a certificated security in
registered form and the security certificate has been delivered to the secured
party under NRS 104.8301 pursuant to the debtor’s security agreement; or

(4) The collateral is deposit accounts, electronic
chattel paper, investment property, or letter-of-credit rights, and the secured
party has control under section 5, 6, 7 or 8 of this act pursuant to the
debtor’s security agreement.

3. Subsection 2 is subject to NRS 104.4210 on the
security interest of a collecting bank, NRS 104.5118 on the security interest
of a letter-of-credit issuer or nominated person, section 11 of this act on a
security interest arising under Article 2 or 2A, and section 17 of this act on
security interests in investment property.

4. A person becomes bound as debtor by a security
agreement entered into by another person if, by operation of law other than
this article or by contract:

(a) The security agreement becomes effective to create a
security interest in his property; or

(b) He becomes generally obligated for the obligations
of the other person, including the obligation secured under the security
agreement, and acquires or succeeds to all or substantially all of the assets
of the other person.

5. If a new debtor becomes bound as debtor by a security
agreement entered into by another person:

(a) The agreement satisfies paragraph (c) of subsection
2 with respect to existing or after-acquired property of the new debtor to the
extent the property is described in the agreement; and

(b) Another agreement is not necessary to make a
security interest in the property enforceable.

6. The attachment of a security interest in collateral
gives the secured party the rights to proceeds provided by section 36 of this
act and is also attachment of a security interest in a supporting obligation
for the collateral.

7. The attachment of a security interest in a right to
payment or performance secured by a security interest or other lien on personal
or real property is also attachment of a security interest in the security
interest, mortgage, or other lien.

8. The attachment of a security interest in a
securities account is also attachment of a security interest in the security
entitlements carried in the securities account.

9. The attachment of a security interest in a commodity
account is also attachment of a security interest in the commodity contracts
carried in the commodity account.

Sec. 15. 1. Except as otherwise provided in
subsection 2, a security agreement may create or provide for a security
interest in after-acquired collateral.

2. A security interest does not attach under a term
constituting an after‑acquired property clause to:

(a) Consumer goods, other than an accession when given
as additional security, unless the debtor acquires rights in them within 10
days after the secured party gives value; or

(b) A commercial tort claim.

3. A security agreement may provide that collateral
secures, or that accounts, chattel paper, payment intangibles, or promissory
notes are sold in connection with, future advances or other value, whether or
not the advances or value are given pursuant to commitment.

Sec. 16. 1. A security interest is not invalid
or fraudulent against creditors solely because:

(a) The debtor has the right or ability to:

(1) Use, commingle, or dispose of all or part of
the collateral, including returned or repossessed goods;

(2) Collect, compromise, enforce, or otherwise deal
with collateral;

(3) Accept the return of collateral or make
repossessions; or

(4) Use, commingle, or dispose of proceeds; or

(b) The secured party fails to require the debtor to
account for proceeds or replace collateral.

2. This section does not relax the requirements of
possession if attachment, perfection, or enforcement of a security interest
depends upon possession of the collateral by the secured party.

Sec. 17. 1. A security interest in favor of a
securities intermediary attaches to a person’s security entitlement if:

(a) He buys a financial asset through the securities intermediary
in a transaction in which he is obligated to pay the purchase price to the
securities intermediary at the time of the purchase; and

(b) The securities intermediary credits the financial
asset to his securities account before he pays the securities intermediary.

2. The security interest described in subsection 1
secures the buyer’s obligation to pay for the financial asset.

3. A security interest in favor of a person that
delivers a certificated security or other financial asset represented by a
writing attaches to the security or other financial asset if:

(a) The security or other financial asset:

(1) In the ordinary course of business is
transferred by delivery with any necessary endorsement or assignment; and

(2) Is delivered under an agreement between persons
in the business of dealing with such securities or financial assets; and

(b) The agreement calls for delivery against payment.

4. The security interest described in subsection 3
secures the obligation to make payment for the delivery.

Sec. 18. 1. Except as otherwise provided in
subsection 4, a secured party shall use reasonable care in the custody and
preservation of collateral in the secured party’s possession. In the case of
chattel paper or an instrument, reasonable care includes taking necessary steps
to preserve rights against prior parties unless otherwise agreed.

2. Except as otherwise provided in subsection 4, if a
secured party has possession of collateral:

(a) Reasonable expenses, including the cost of insurance
and payment of taxes or other charges, incurred in the custody, preservation,
use, or operation of the collateral are chargeable to the debtor and are
secured by the collateral;

(b) The risk of accidental loss or damage is on the
debtor to the extent of a deficiency in any effective insurance coverage;

(c) The secured party shall keep the collateral
identifiable, but fungible collateral may be commingled; and

(d) The secured party may use or operate the collateral:

(1) For the purpose of preserving the collateral or
its value;

(2) As permitted by an order of a court having
competent jurisdiction; or

(3) Except in the case of consumer goods, in the
manner and to the extent agreed by the debtor.

3. Except as otherwise provided in subsection 4, a secured
party having possession of collateral or control of collateral under section 5,
6, 7 or 8 of this act:

(a) May hold as additional security any proceeds, except
money or funds, received from the collateral;

(b) Shall apply money or funds received from the
collateral to reduce the secured obligation, unless remitted to the debtor; and

(c) May create a security interest in the collateral.

4. If the secured party is a buyer of accounts, chattel
paper, payment intangibles, or promissory notes or a consignor:

(a) Subsection 1 does not apply unless the secured party
is entitled under an agreement:

(1) To charge back uncollected collateral; or

(2) Otherwise to full or limited recourse against
the debtor or a secondary obligor based on the nonpayment or other default of
an account debtor or other obligor on the collateral; and

(b) Subsections 2 and 3 do not apply.

Sec. 19. If there is no outstanding secured
obligation and the secured party is not committed to make advances, incur
obligations, or otherwise give value, within 10 days after receiving an
authenticated demand by the debtor:

1. A secured party having control of a deposit account
under paragraph (b) of subsection 1 of section 5 of this act shall send to the
bank with which the deposit account is maintained an authenticated statement
that releases the bank from any further obligation to comply with instructions
originated by the secured party;

2. A secured party having control of a deposit account
under paragraph (c) of subsection 1 of section 5 of this act shall:

(a) Pay the debtor the balance on deposit in the deposit
account; or

(b) Transfer the balance on deposit into a deposit
account in the debtor’s name;

3. A secured party, other than a buyer, having control
of electronic chattel paper under section 6 of this act shall:

(a) Communicate the authoritative copy of the electronic
chattel paper to the debtor or its designated custodian;

(b) If the debtor designates a custodian that is the
designated custodian with which the authoritative copy of the electronic
chattel paper is maintained for the secured party, communicate to the custodian
an authenticated record releasing the designated custodian from any further
obligation to comply with instructions originated by the secured party and
instructing the custodian to comply with instructions originated by the debtor;
and

(c) Take appropriate action to enable the debtor or its
designated custodian to make copies of or revisions to the authoritative copy
which add or change an identified assignee of the authoritative copy without
the consent of the secured party;

4. A secured party having control of investment
property under paragraph (b) of subsection 4 of NRS 104.8106 or under
subsection 2 of section 7 of this act shall send to the securities intermediary
or commodity intermediary with which the security entitlement or commodity
contract is maintained an authenticated record that releases the securities
intermediary or commodity intermediary from any further obligation to comply
with entitlement orders or directions originated by the secured party; and

5. A secured party having control of a letter-of-credit
right under section 8 of this act shall send to each person having an
unfulfilled obligation to pay or deliver proceeds of the letter of credit to
the secured party an authenticated release from any further obligation to pay
or deliver proceeds of the letter of credit to the secured party.

(b) The secured party is not committed to make advances,
incur obligations, or otherwise give value.

2. Within 10 days after receiving an authenticated
demand by the debtor, a secured party shall send to an account debtor that has
received notification of an assignment to the secured party as assignee under
subsection 1 of section 69 of this act an authenticated record that releases
the account debtor from any further obligation to the secured party.

3. This section does not apply to an assignment
constituting the sale of an account, chattel paper, or payment intangible.

Sec. 21. 1. In this section:

(a) “Request” means a record of a type described in
paragraph (b), (c), or (d).

(b) “Request for an accounting” means a record
authenticated by a debtor requesting that the recipient provide an accounting
of the unpaid obligations secured by collateral and reasonably identifying the
transaction or relationship that is the subject of the request.

(c) “Request regarding a list of collateral” means a
record authenticated by a debtor requesting that the recipient approve or
correct a list of what the debtor believes to be the collateral securing an
obligation and reasonably identifying the transaction or relationship that is
the subject of the request.

(d) “Request regarding a statement of account” means a
record authenticated by a debtor requesting that the recipient approve or
correct a statement indicating what the debtor believes to be the aggregate
amount of unpaid obligations secured by collateral as of a specified date and
reasonably identifying the transaction or relationship that is the subject of
the request.

2. Subject to subsections 3, 4, 5 and 6, a secured
party, other than a buyer of accounts, chattel paper, payment intangibles, or
promissory notes or a consignor, shall comply with a request within 14 days
after receipt:

(a) In the case of a request for an accounting, by
authenticating and sending to the debtor an accounting; and

(b) In the case of a request regarding a list of
collateral or a request regarding a statement of account, by authenticating and
sending to the debtor an approval or correction.

3. A secured party that claims a security interest in
all of a particular type of collateral owned by the debtor may comply with a
request regarding a list of collateral by sending to the debtor an
authenticated record including a statement to that effect within 14 days after
receipt.

4. A person that receives a request regarding a list of
collateral, claims no interest in the collateral when it receives the request,
and claimed an interest in the collateral at an earlier time shall comply with
the request within 14 days after receipt by sending to the debtor an
authenticated record:

(b) If known to the recipient, providing the name and
mailing address of any assignee of or successor to the recipient’s security
interest in the collateral.

5. A person that receives a request for an accounting
or a request regarding a statement of account, claims no interest in the
obligations when it receives the request, and claimed an interest in the
obligations at an earlier time shall comply with the request within 14 days
after receipt by sending to the debtor an authenticated record:

(a) Disclaiming any interest in the obligations; and

(b) If known to the recipient, providing the name and
mailing address of any assignee of or successor to the recipient’s interest in
the obligations.

6. A debtor is entitled without charge to one response
to a request under this section during any 6-month period. The secured party
may require payment of a charge not exceeding $25 for each additional response.

Sec. 22. Except as otherwise provided in sections
24 to 27, inclusive, of this act, the following rules determine the law
governing perfection, the effect of perfection or nonperfection, and the
priority of a security interest in collateral:

1. Except as otherwise provided in this section, while
a debtor is located in a jurisdiction, the law of that jurisdiction governs
perfection, the effect of perfection or nonperfection, and the priority of a
security interest in collateral.

2. While collateral is located in a jurisdiction, the
law of that jurisdiction governs perfection, the effect of perfection or
nonperfection, and the priority of a possessory security interest in that
collateral.

3. Except as otherwise provided in subsections 4, 5 and
6, while negotiable documents, goods, instruments, money, or tangible chattel
paper is located in a jurisdiction, the law of that jurisdiction governs the
effect of perfection or nonperfection and the priority of a nonpossessory security
interest.

4. While goods are located in a jurisdiction, the law
of that jurisdiction governs perfection of a security interest in the goods by
a fixture filing.

5. The law of the jurisdiction in which timber to be
cut is located governs perfection of a security interest in the timber.

6. The law of the jurisdiction in which the wellhead or
minehead is located governs perfection, the effect of perfection or
nonperfection, and the priority of a security interest in as-extracted
collateral.

Sec. 23. While farm products are located in a
jurisdiction, the law of that jurisdiction governs perfection, the effect of
perfection or nonperfection, and the priority of an agricultural lien on the
farm products.

Sec. 24. 1. This section applies to goods
covered by a certificate of title, even if there is no other relationship
between the jurisdiction under whose certificate of title the goods are covered
and the goods or the debtor.

2. Goods become covered by a certificate of title when
a valid application for the certificate of title and the applicable fee are
delivered to the appropriate authority. Goods cease to be covered by a
certificate of title at the earlier of the time the certificate of title ceases
to be effective under the law of the
issuing jurisdiction or the time the goods become covered subsequently by a
certificate of title issued by another jurisdiction.

the law of the issuing jurisdiction or the time the goods
become covered subsequently by a certificate of title issued by another
jurisdiction.

3. The law of the jurisdiction under whose certificate
of title the goods are covered governs perfection, the effect of perfection or
nonperfection, and the priority of a security interest in goods covered by a
certificate of title from the time the goods become covered by the certificate
of title until the goods cease to be covered by the certificate of title.

Sec. 25. 1. The law of a bank’s jurisdiction
governs perfection, the effect of perfection or nonperfection, and the priority
of a security interest in a deposit account maintained with that bank.

2. The following rules determine a bank’s jurisdiction
for purposes of this part:

(a) If an agreement between the bank and the debtor
governing the deposit account expressly provides that a particular jurisdiction
is the bank’s jurisdiction for purposes of this part, this article, or the
Uniform Commercial Code, that jurisdiction is the bank’s jurisdiction.

(b) If paragraph (a) does not apply and an agreement
between the bank and its customer governing the deposit account expressly
provides that the agreement is governed by the law of a particular
jurisdiction, that jurisdiction is the bank’s jurisdiction.

(c) If neither paragraph (a) nor paragraph (b) applies
and an agreement between the bank and its customer governing the deposit
account expressly provides that the deposit account is maintained at an office
in a particular jurisdiction, that jurisdiction is the bank’s jurisdiction.

(d) If neither paragraph (a) nor paragraph (b) nor
paragraph (c) applies, the bank’s jurisdiction is the jurisdiction in which the
office identified in an account statement as the office serving the customer’s
account is located.

(e) If none of the preceding paragraphs applies, the
bank’s jurisdiction is the jurisdiction in which the chief executive office of
the bank is located.

(a) While a security certificate is located in a
jurisdiction, the law of that jurisdiction governs perfection, the effect of
perfection or nonperfection, and the priority of a security interest in the
certificated security represented thereby.

(b) The law of the issuer’s jurisdiction as specified in
subsection 4 of NRS 104.8110 governs perfection, the effect of perfection or
nonperfection, and the priority of a security interest in an uncertificated
security.

(c) The law of the securities intermediary’s
jurisdiction as specified in subsection 5 of NRS 104.8110 governs perfection,
the effect of perfection or nonperfection, and the priority of a security
interest in a security entitlement or securities account.

(d) The law of the commodity intermediary’s jurisdiction
governs perfection, the effect of perfection or nonperfection, and the priority
of a security interest in a commodity contract or commodity account.

2. The following rules determine a commodity
intermediary’s jurisdiction for purposes of this part:

(a) If an agreement between the commodity intermediary
and commodity customer governing the commodity account expressly provides that
a particular jurisdiction is the commodity intermediary’s jurisdiction for
purposes of this part, this article, or the Uniform Commercial Code, that
jurisdiction is the commodity intermediary’s jurisdiction.

(b) If paragraph (a) does not apply and an agreement
between the commodity intermediary and commodity customer governing the
commodity account expressly provides that the agreement is governed by the law
of a particular jurisdiction, that jurisdiction is the commodity intermediary’s
jurisdiction.

(c) If neither paragraph (a) nor paragraph (b) applies
and an agreement between the commodity intermediary and commodity customer
governing the commodity account expressly provides that the commodity account
is maintained at an office in a particular jurisdiction, that jurisdiction is
the commodity intermediary’s jurisdiction.

(d) If neither paragraph (a) nor paragraph (b) nor
paragraph (c) applies, the commodity intermediary’s jurisdiction is the
jurisdiction in which the office identified in an account statement as the
office serving the commodity customer’s account is located.

(e) If none of the preceding paragraphs applies, the
commodity intermediary’s jurisdiction is the jurisdiction in which the chief
executive office of the commodity intermediary is located.

3. The law of the jurisdiction in which the debtor is
located governs:

(a) Perfection of a security interest in investment
property by filing;

(b) Automatic perfection of a security interest in
investment property granted by a broker or securities intermediary; and

(c) Automatic perfection of a security interest in a
commodity contract or commodity account granted by a commodity intermediary.

Sec. 27. 1. Subject to subsection 3, the law of
the issuer’s jurisdiction or a nominated person’s jurisdiction governs
perfection, the effect of perfection or nonperfection, and the priority of a
security interest in a letter-of-credit right if the issuer’s jurisdiction or
nominated person’s jurisdiction is a state.

2. For purposes of this part, an issuer’s jurisdiction
or nominated person’s jurisdiction is the jurisdiction whose law governs the
liability of the issuer or nominated person with respect to the
letter-of-credit right as provided in NRS 104.5116.

3. This section does not apply to a security interest
that is perfected only under subsection 4 of section 29 of this act.

Sec. 28. 1. In this section, “place of business”
means a place where a debtor conducts its affairs.

2. Except as otherwise provided in this section, the
following rules determine a debtor’s location:

(a) A natural person is located at his residence.

(b) Any other debtor having only one place of business
is located at its place of business.

(c) Any other debtor having more than one place of
business is located at its chief executive office.

3. Subsection 2 applies only if a debtor’s residence,
place of business, or chief executive office, as applicable, is located in a
jurisdiction whose law requires information concerning the existence of a
nonpossessory security interest to be made generally available in a filing,
recording, or registration system as a condition or result of the security
interest’s obtaining priority over the rights of a lien creditor with respect
to the collateral. If subsection 2 does not apply, the debtor is deemed to be
located in the District of Columbia.

4. A person that ceases to exist, have a residence, or
have a place of business continues to be located in the jurisdiction specified
by subsections 2 and 3.

5. A registered organization that is organized under
the law of a state is located in that state.

6. Except as otherwise provided in subsection 9, a
registered organization that is organized under the law of the United States
and a branch or agency of a bank that is not organized under the law of the
United States or a state are located or deemed to be located:

(a) In the state that the law of the United States
designates, if the law designates a state of location;

(b) In the state that the registered organization,
branch, or agency designates, if the law of the United States authorizes the
registered organization, branch, or agency to designate its state of location;
or

(c) In the District of Columbia, if neither paragraph
(a) nor paragraph (b) applies.

7. A registered organization continues to be located in
the jurisdiction specified by subsection 5 or 6 notwithstanding:

(a) The suspension, revocation, forfeiture, or lapse of
the registered organization’s status as such in its jurisdiction of
organization; or

(b) The dissolution, winding up, or cancellation of the
existence of the registered organization.

8. The United States is deemed to be located in the
District of Columbia.

9. A branch or agency of a bank that is not organized
under the law of the United States or a state is located in the state in which
the branch or agency is licensed, if all branches and agencies of the bank are
licensed in only one state.

10. A foreign air carrier under the Federal Aviation
Act of 1958, as amended, is located at the designated office of the agent upon
which service of process may be made on behalf of the carrier.

11. This section applies only for purposes of this
part.

Sec. 29. 1. Except as otherwise provided in this
section and section 30 of this act, a security interest is perfected if it has
attached and all of the applicable requirements for perfection in sections 31
to 37, inclusive, of this act have been satisfied. A security interest is
perfected when it attaches if the applicable requirements are satisfied before
the security interest attaches.

2. An agricultural lien is perfected if it has become
effective and all of the applicable requirements for perfection in section 31
of this act have been satisfied. An agricultural lien is perfected when it
becomes effective if the applicable requirements are satisfied before the
agricultural lien becomes effective.

3. A security interest or agricultural lien is
perfected continuously if it is originally perfected in one manner under this
article and is later perfected in another manner under this article, without an
intermediate period when it was unperfected.

4. Perfection of a security interest in collateral also
perfects a security interest in a supporting obligation for the collateral.

5. Perfection of a security interest in a right to
payment or performance also perfects a security interest in a security
interest, mortgage, or other lien on personal or real property securing the
right.

6. Perfection of a security interest in a securities
account also perfects a security interest in the security entitlements carried
in the securities account.

7. Perfection of a security interest in a commodity
account also perfects a security interest in the commodity contracts carried in
the commodity account.

Sec. 30. The following security interests are
perfected when they attach:

1. A purchase-money security interest in consumer
goods, except as otherwise provided in subsection 2 of section 32 of this act
with respect to consumer goods that are subject to a statute or treaty
described in subsection 1 of that section;

2. An assignment of accounts or payment intangibles
which does not by itself or in conjunction with other assignments to the same
assignee transfer a significant part of the assignor’s outstanding accounts or
payment intangibles;

3. A sale of a payment intangible;

4. A sale of a promissory note;

5. A security interest created by the assignment of a
health-care-insurance receivable to the provider of the health-care goods or
services;

6. A security interest arising under NRS 104.2401, 104.2505,
subsection 3 of NRS 104.2711, or subsection 5 of NRS 104A.2508, until the
debtor obtains possession of the collateral;

7. A security interest of a collecting bank arising
under NRS 104.4210;

8. A security interest of an issuer or nominated person
arising under NRS 104.5118;

9. A security interest arising in the purchase or
delivery of a financial asset under section 17 of this act;

10. A security interest in investment property created
by a broker or securities intermediary;

11. A security interest in a commodity contract or a
commodity account created by a commodity intermediary;

12. An assignment for the benefit of all creditors of
the transferor and subsequent transfers by the assignee thereunder; and

13. A security interest created by an assignment of a
beneficial interest in a decedent’s estate.

Sec. 31. 1. Except as otherwise provided in subsection
2 or subsection 2 of section 33 of this act, a financing statement must be
filed to perfect all security interests and agricultural liens.

2. The filing of a financing statement is not necessary
to perfect a security interest:

(a) That is perfected under subsection 4, 5, 6 or 7 of
section 29 of this act;

(b) That is perfected under section 30 of this act when
it attaches;

(c) In property subject to a statute, regulation, or
treaty described in subsection 1 of section 32 of this act;

(d) In goods in possession of a bailee which is
perfected under paragraph (a) or (b) of subsection 4 of section 33 of this act;

(e) In certificated securities, documents, goods, or
instruments which is perfected without filing or possession under subsection 5,
6 or 7 of section 33 of this act;

(f) In collateral in the secured party’s possession
under section 34 of this act;

(g) In a certificated security which is perfected by
delivery of the security certificate to the secured party under section 34 of
this act;

(h) In deposit accounts, electronic chattel paper,
investment property, or letter-of-credit rights which is perfected by control
under section 35 of this act;

(i) In proceeds which is perfected under section 36 of
this act; or

(j) That is perfected under section 37 of this act.

3. If a secured party assigns a perfected security
interest or agricultural lien, a filing under this article is not required to
reconfirm the perfected status of the security interest against creditors of
and transferees from the original debtor.

Sec. 32. 1. Except as otherwise provided in
subsection 4, the filing of a financing statement is not necessary or effective
to perfect a security interest in property subject to:

(a) A statute, regulation, or treaty of the United States
whose requirements for a security interest’s obtaining priority over the rights
of a lien creditor with respect to the property preempt subsection 1 of section
31 of this act;

(c) A certificate-of-title statute of another
jurisdiction which provides for a security interest to be indicated on the
certificate as a condition or result of the security interest’s obtaining priority
over the rights of a lien creditor with respect to the property.

2. Compliance with the requirements of a statute,
regulation, or treaty described in subsection 1 for obtaining priority over the
rights of a lien creditor is equivalent to the filing of a financing statement
under this article. Except as otherwise provided in subsection 4, section 34 of
this act and subsections 4 and 5 of section 37 of this act for goods covered by
a certificate of title, a security interest in property subject to a statute, regulation, or treaty described in subsection 1 may be
perfected only by compliance with those requirements, and a security interest
so perfected remains perfected notwithstanding a change in the use or transfer
of possession of the collateral.

regulation, or treaty described in subsection 1 may be
perfected only by compliance with those requirements, and a security interest
so perfected remains perfected notwithstanding a change in the use or transfer
of possession of the collateral.

3. Except as otherwise provided in subsection 4 and
subsections 4 and 5 of section 37 of this act, duration and renewal of
perfection of a security interest perfected by compliance with the requirements
prescribed by a statute, regulation, or treaty described in subsection 1 are
governed by the statute, regulation, or treaty. In other respects, the security
interest is subject to this article.

4. During any period in which collateral is inventory
held for sale or lease by a person or leased by that person as lessor and that
person is in the business of selling or leasing goods of that kind, this
section does not apply to a security interest in that collateral created by
that person as debtor.

Sec. 33. 1. A security interest in chattel
paper, negotiable documents, instruments, or investment property may be
perfected by filing.

2. Except as otherwise provided in subsections 3 and 4
of section 36 of this act for proceeds:

(a) A security interest in a deposit account may be
perfected only by control under section 35 of this act;

(b) A security interest in a letter-of-credit right may
be perfected only by control under section 35 of this act, except as otherwise
provided in subsection 4 of section 29 of this act; and

(c) A security interest in money may be perfected only
by the secured party’s taking possession under section 34 of this act.

3. While goods are in the possession of a bailee that
has issued a negotiable document covering the goods:

(a) A security interest in the goods may be perfected by
perfecting a security interest in the document; and

(b) A security interest perfected in the document has
priority over any security interest that becomes perfected in the goods by
another method during that time.

4. While goods are in the possession of a bailee that
has issued a nonnegotiable document covering the goods, a security interest in
the goods may be perfected by:

(a) Issuance of a document in the name of the secured
party;

(b) The bailee’s receipt of notification of the secured
party’s interest; or

(c) Filing as to the goods.

5. A security interest in certificated securities,
negotiable documents, or instruments is perfected without filing or the taking
of possession for a period of 20 days after the time it attaches to the extent
that it arises for new value given under an authenticated security agreement.

6. A perfected security interest in a negotiable
document or goods in possession of a bailee, other than one that has issued a
negotiable document for the goods, remains perfected for 20 days without filing
if the secured party makes available to the debtor the goods or documents
representing the goods for the purpose of:

(b) Loading, unloading, storing, shipping,
transshipping, manufacturing, processing, or otherwise dealing with them in a
manner preliminary to their sale or exchange.

7. A perfected security interest in a certificated
security or instrument remains perfected for 20 days without filing if the
secured party delivers the security certificate or instrument to the debtor for
the purpose of:

8. After the 20‑day period specified in
subsection 5, 6 or 7 expires, perfection depends upon compliance with this
article.

Sec. 34. 1. Except as otherwise provided in
subsection 2, a secured party may perfect a security interest in negotiable
documents, goods, instruments, money, or tangible chattel paper by taking
possession of the collateral. A secured party may perfect a security interest
in certificated securities by taking delivery of the certificated securities
under NRS 104.8301.

2. With respect to goods covered by a certificate of
title issued by this state, a secured party may perfect a security interest in
the goods by taking possession of the goods only in the circumstances described
in subsection 5 of section 37 of this act.

3. With respect to collateral other than certificated
securities and goods covered by a document, a secured party takes possession of
collateral in the possession of a person other than the debtor, the secured
party, or a lessee of the collateral from the debtor in the ordinary course of
the debtor’s business, when:

(a) The person in possession authenticates a record
acknowledging that it holds possession of the collateral for the secured
party’s benefit; or

(b) The person takes possession of the collateral after
having authenticated a record acknowledging that it will hold possession of
collateral for the secured party’s benefit.

4. If perfection of a security interest depends upon
possession of the collateral by a secured party, perfection occurs no earlier
than the time the secured party takes possession and continues only while he
retains possession.

5. A security interest in a certificated security in
registered form is perfected by delivery when delivery of the certificated
security occurs under NRS 104.8301 and remains perfected by delivery until the
debtor obtains possession of the security certificate.

6. A person in possession of collateral is not required
to acknowledge that it holds possession for a secured party’s benefit.

7. If a person acknowledges that it holds possession
for the secured party’s benefit:

(a) The acknowledgment is effective under subsection 3
or subsection 1 of NRS 104.8301, even if the acknowledgment violates the rights
of a debtor; and

(b) Unless the person otherwise agrees or law other than
this article otherwise provides, he does not owe any duty to the secured party
and is not required to confirm the acknowledgment to another person.

8. A secured party having possession of collateral does
not relinquish possession by delivering the collateral to a person other than
the debtor or a lessee of the collateral from the debtor in the ordinary course
of the debtor’s business if he was instructed before the delivery or is
instructed contemporaneously with the delivery:

(a) To hold possession of the collateral for the secured
party’s benefit; or

(b) To redeliver the collateral to the secured party.

9. A secured party does not relinquish possession, even
if a delivery under subsection 8 violates the rights of a debtor. A person to
which collateral is delivered under subsection 8 does not owe any duty to the
secured party and is not required to confirm the delivery to another person
unless he otherwise agrees or law other than this article otherwise provides.

Sec. 35. 1. A security interest in investment
property, deposit accounts, letter-of-credit rights, or electronic chattel
paper may be perfected by control of the collateral under section 5, 6, 7 or 8
of this act.

2. A security interest in deposit accounts, electronic
chattel paper, or letter-of-credit rights is perfected by control under section
5, 6, 7 or 8 of this act when the secured party obtains control and remains
perfected by control only while the secured party retains control.

3. A security interest in investment property is
perfected by control under section 7 of this act from the time the secured
party obtains control and remains perfected by control until:

(a) The secured party does not have control; and

(b) One of the following occurs:

(1) If the collateral is a certificated security,
the debtor has or acquires possession of the security certificate;

(2) If the collateral is an uncertificated
security, the issuer has registered or registers the debtor as the registered
owner; or

(3) If the collateral is a security entitlement,
the debtor is or becomes the entitlement holder.

Sec. 36. 1. Except as otherwise provided in this
article and in subsection 2 of NRS 104.2403:

(a) A security interest or agricultural lien continues
in collateral notwithstanding sale, lease, license, exchange, or other
disposition thereof unless the secured party authorized the disposition free of
the security interest or agricultural lien; and

(b) A security interest attaches to any identifiable
proceeds of collateral.

2. Proceeds that are commingled with other property are
identifiable proceeds:

(a) If the proceeds are goods, to the extent provided by
section 57 of this act; and

(b) If the proceeds are not goods, to the extent that
the secured party identifies the proceeds by a method of tracing, including
application of equitable principles, that is permitted under law other than
this article with respect to commingled property of the type involved.

3. A security interest in proceeds is a perfected
security interest if the security interest in the original collateral was
perfected.

4. A perfected security interest in proceeds becomes
unperfected on the 21st day after the security interest attaches to the
proceeds unless:

(a) The following conditions are satisfied:

(1) A filed financing statement covers the original
collateral;

(2) The proceeds are collateral in which a security
interest may be perfected by filing in the office in which the financing
statement has been filed; and

(3) The proceeds are not acquired with cash
proceeds;

(b) The proceeds are identifiable cash proceeds; or

(c) The security interest in the proceeds is perfected
when the security interest attaches to the proceeds or within 20 days
thereafter.

5. If a filed financing statement covers the original
collateral, a security interest in proceeds which remains perfected under
paragraph (a) of subsection 4 becomes unperfected at the later of:

(a) When the effectiveness of the filed financing
statement lapses under section 87 of this act or is terminated under section 85
of this act; or

(b) The 21st day after the security interest attaches to
the proceeds.

Sec. 37. 1. A security interest perfected
pursuant to the law of the jurisdiction designated in subsection 1 of section
22 of this act or subsection 3 of section 26 of this act remains perfected
until the earliest of:

(a) The time perfection would have ceased under the law
of that jurisdiction;

(b) The expiration of 4 months after a change of the
debtor’s location to another jurisdiction; or

(c) The expiration of 1 year after a transfer of
collateral to a person that thereby becomes a debtor and is located in another
jurisdiction.

2. If a security interest described in subsection 1
becomes perfected under the law of the other jurisdiction before the earliest
time or event described in that subsection, it remains perfected thereafter. If
the security interest does not become perfected under the law of the other
jurisdiction before the earliest time or event, it becomes unperfected and is
deemed never to have been perfected as against a purchaser of the collateral
for value.

3. A possessory security interest in collateral, other
than goods covered by a certificate of title and as-extracted collateral
consisting of goods, remains continuously perfected if:

(a) The collateral is located in one jurisdiction and
subject to a security interest perfected under the law of that jurisdiction;

(b) Thereafter the collateral is brought into another
jurisdiction; and

(c) Upon entry into the other jurisdiction, the security
interest is perfected under the law of the other jurisdiction.

4. Except as otherwise provided in subsection 5, a
security interest in goods covered by a certificate of title which is perfected
by any method under the law of another jurisdiction when the goods become
covered by a certificate of title from this state remains perfected until the
security interest would have become unperfected under the law of the other
jurisdiction had the goods not become so covered.

5. A security interest described in subsection 4
becomes unperfected as against a purchaser of the goods for value and is deemed
never to have been perfected as against a
purchaser of the goods for value if the applicable requirements for perfection
under subsection 2 of section 32 of this act or under section 34 of this act
are not satisfied before the earlier of:

been perfected as against a purchaser of the goods for value
if the applicable requirements for perfection under subsection 2 of section 32
of this act or under section 34 of this act are not satisfied before the
earlier of:

(a) The time the security interest would have become
unperfected under the law of the other jurisdiction had the goods not become
covered by a certificate of title from this state; or

(b) The expiration of 4 months after the goods had
become so covered.

6. A security interest in deposit accounts,
letter-of-credit rights, or investment property which is perfected under the
law of the bank’s jurisdiction, the issuer’s jurisdiction, a nominated person’s
jurisdiction, the securities intermediary’s jurisdiction, or the commodity
intermediary’s jurisdiction, as applicable, remains perfected until the earlier
of:

(a) The time the security interest would have become
unperfected under the law of that jurisdiction; or

(b) The expiration of 4 months after a change of the
applicable jurisdiction to another jurisdiction.

7. If a security interest described in subsection 6
becomes perfected under the law of the other jurisdiction before the earlier of
the time or the end of the period described in that subsection, it remains
perfected thereafter. If the security interest does not become perfected under
the law of the other jurisdiction before the earlier of that time or the end of
that period, it becomes unperfected and is deemed never to have been perfected
as against a purchaser of the collateral for value.

Sec. 38. 1. An unperfected security interest or
agricultural lien is subordinate to the rights of:

(a) A person entitled to priority under section 43 of
this act; and

(b) A person that becomes a lien creditor before the
earlier of the time the security interest or agricultural lien is perfected or
a financing statement covering the collateral is filed.

2. Except as otherwise provided in subsection 5, a
buyer, other than a secured party, of chattel paper, documents, goods,
instruments, or a security certificate takes free of a security interest or
agricultural lien if the buyer gives value and receives delivery of the
collateral without knowledge of the security interest or agricultural lien and
before it is perfected.

3. Except as otherwise provided in subsection 5, a
lessee of goods takes free of a security interest or agricultural lien if he
gives value and receives delivery of the collateral without knowledge of the
security interest or agricultural lien and before it is perfected.

4. A licensee of a general intangible or a buyer, other
than a secured party, of accounts, general intangibles, or investment property
other than a certificated security takes free of a security interest if he
gives value without knowledge of the security interest and before it is
perfected.

5. Except as otherwise provided in sections 41 and 42
of this act, if a person files a financing statement with respect to a
purchase-money security interest before or within 20 days after the debtor
receives delivery of the collateral, the security interest takes priority over
the rights of a buyer, lessee, or lien creditor which arise between the time
the security interest attaches and the time of filing.

Sec. 39. For purposes of determining the rights
of creditors of, and purchasers for value of an account or chattel paper from,
a debtor that has sold an account or chattel paper, while the buyer’s security
interest is unperfected, the debtor has rights and title to the account or
chattel paper identical to those the debtor sold.

Sec. 40. 1. Except as otherwise provided in
subsection 2, for purposes of determining the rights of creditors of, and
purchasers for value of goods from, a consignee, while the goods are in the
possession of the consignee, the consignee is deemed to have rights and title
to the goods identical to those the consignor had or had power to transfer.

2. For purposes of determining the rights of a creditor
of a consignee, law other than this article determines the rights and title of
a consignee while goods are in the consignee’s possession if, under this part,
a perfected security interest held by the consignor would have priority over
the rights of the creditor.

Sec. 41. 1. Except as otherwise provided in
subsection 5, a buyer in the ordinary course of business, other than a person
buying farm products from a person engaged in farming operations, takes free of
a security interest created by the buyer’s seller, even if the security interest
is perfected and the buyer knows of its existence.

2. Except as otherwise provided in subsection 5, a
buyer of goods from a person who used or bought the goods for use primarily for
personal, family, or household purposes takes free of a security interest, even
if perfected, if he buys:

(a) Without knowledge of the security interest;

(b) For value;

(c) Primarily for his personal, family, or household
purposes; and

(d) Before the filing of a financing statement covering
the goods.

3. To the extent that it affects the priority of a
security interest over a buyer of goods under subsection 2, the period of
effectiveness of a filing made in the jurisdiction in which the seller is
located is governed by subsections 1 and 2 of section 37 of this act.

4. A buyer in the ordinary course of business buying
oil, gas, or other minerals at the wellhead or minehead or after extraction
takes free of an interest arising out of an encumbrance.

5. Subsections 1 and 2 do not affect a security
interest in goods in the possession of the secured party under section 34 of this
act.

Sec. 42. 1. In this section, “licensee in
ordinary course of business” means a person that becomes a licensee of a
general intangible in good faith, without knowledge that the license violates
the rights of another person in the general intangible, and in the ordinary
course from a person in the business of licensing general intangibles of that
kind. A person becomes a licensee in the ordinary course if the license to him
comports with the usual or customary practices in the kind of business in which
the licensor is engaged or with the licensor’s own usual or customary
practices.

2. A licensee in the ordinary course of business takes
his rights under a nonexclusive license free of a security interest in the
general intangible created by the licensor, even if the security interest is
perfected and he knows of its existence.

3. A lessee in the ordinary course of business takes
his leasehold interest free of a security interest in the goods created by the
lessor, even if the security interest is perfected and he knows of its
existence.

Sec. 43. 1. Except as otherwise provided in this
section, priority among conflicting security interests and agricultural liens
in the same collateral is determined according to the following rules:

(a) Conflicting perfected security interests and
agricultural liens rank according to priority in time of filing or perfection.
Priority dates from the earlier of the time a filing covering the collateral is
first made or the security interest or agricultural lien is first perfected, if
there is no period thereafter when there is neither filing nor perfection.

(b) A perfected security interest or agricultural lien
has priority over a conflicting unperfected security interest or agricultural
lien.

(c) The first security interest or agricultural lien to
attach or become effective has priority if conflicting security interests and
agricultural liens are unperfected.

2. For the purposes of paragraph (a) of subsection 1:

(a) The time of filing or perfection as to a security
interest in collateral is also the time of filing or perfection as to a
security interest in proceeds; and

(b) The time of filing or perfection as to a security
interest in collateral supported by a supporting obligation is also the time of
filing or perfection as to a security interest in the supporting obligation.

3. Except as otherwise provided in subsection 6, a
security interest in collateral which qualifies for priority over a conflicting
security interest under section 48, 49, 50, 51 or 52 of this act also has
priority over a conflicting security interest in:

(a) Any supporting obligation for the collateral; and

(b) Proceeds of the collateral if:

(1) The security interest in proceeds is perfected;

(2) The proceeds are cash proceeds or of the same
type as the collateral; and

(3) In the case of proceeds that are proceeds of
proceeds, all intervening proceeds are cash proceeds, proceeds of the same type
as the collateral, or an account relating to the collateral.

4. Subject to subsection 5 and except as otherwise
provided in subsection 6, if a security interest in chattel paper, deposit
accounts, negotiable documents, instruments, investment property, or
letter-of-credit rights is perfected by a method other than filing, conflicting
perfected security interests in proceeds of the collateral rank according to
priority in time of filing.

5. Subsection 4 applies only if the proceeds of the
collateral are not cash proceeds, chattel paper, negotiable documents,
instruments, investment property, or letter-of-credit rights.

(b) NRS 104.4210 with respect to a security interest of
a collecting bank;

(c) NRS 104.5118 with respect to a security interest of
an issuer or nominated person; and

(d) Section 11 of this act with respect to a security
interest arising under Article 2 or 2A.

7. A perfected agricultural lien on collateral has
priority over a conflicting security interest in or agricultural lien on the
same collateral if the statute creating the agricultural lien so provides.

Sec. 44. 1. Except as otherwise provided in
subsection 3, for purposes of determining the priority of a perfected security
interest under subsection 1 of section 43 of this act, perfection of the
security interest dates from the time an advance is made to the extent that the
security interest secures an advance that:

(a) Is made while the security interest is perfected
only:

(1) Under section 30 of this act when it attaches;
or

(2) Temporarily under subsection 5, 6, or 7 of
section 33 of this act; and

(b) Is not made pursuant to a commitment entered into
before or while the security interest is perfected by a method other than under
section 30 of this act or subsection 5, 6 or 7 of section 33 of this act.

2. Except as otherwise provided in subsection 3, a
security interest is subordinate to the rights of a person that becomes a lien
creditor while the security interest is perfected only to the extent that it
secures advances made more than 45 days after he becomes a lien creditor unless
the advance is made:

(a) Without knowledge of the lien; or

(b) Pursuant to a commitment entered into without
knowledge of the lien.

3. Subsections 1 and 2 do not apply to a security
interest held by a secured party that is a buyer of accounts, chattel paper,
payment intangibles, or promissory notes or a consignor.

4. Except as otherwise provided in subsection 5, a
buyer of goods other than a buyer in the ordinary course of business takes free
of a security interest to the extent that it secures advances made after the
earlier of:

(a) The time the secured party acquires knowledge of the
buyer’s purchase; or

(b) Forty-five days after the purchase.

5. Subsection 4 does not apply if the advance is made
pursuant to a commitment entered into without knowledge of the buyer’s purchase
and before the expiration of the 45‑day period.

6. Except as otherwise provided in subsection 7, a
lessee of goods, other than a lessee in ordinary course of business, takes the
leasehold free of a security interest to the extent that it secures advances
made after the earlier of:

7. Subsection 6 does not apply if the advance is made
pursuant to a commitment entered into without knowledge of the lease and before
the expiration of the 45‑day period.

Sec. 45. 1. Subject to subsection 2 and except
as otherwise provided in subsection 7, a perfected purchase-money security
interest in inventory has priority over a conflicting security interest in the
same inventory, has priority over a conflicting security interest in chattel
paper or an instrument constituting proceeds of the inventory and in proceeds
of the chattel paper, if so provided in section 51 of this act, and, except as
otherwise provided in section 48 of this act, also has priority in identifiable
cash proceeds of the inventory to the extent the identifiable cash proceeds are
received on or before the delivery of the inventory to a buyer, if:

(a) The purchase-money security interest is perfected
when the debtor receives possession of the inventory;

(b) The purchase-money secured party sends an
authenticated notification to the holder of the conflicting security interest;

(c) The holder of the conflicting security interest
receives the notification within 5 years before the debtor receives possession
of the inventory; and

(d) The notification states that the person sending the
notification has or expects to acquire a purchase-money security interest in
inventory of the debtor and describes the inventory.

2. Paragraphs (b), (c) and (d) of subsection 1 apply
only if the holder of the conflicting security interest had filed a financing
statement covering the same types of inventory:

(a) If the purchase-money security interest is perfected
by filing, before the date of the filing; or

(b) If the purchase-money security interest is
temporarily perfected without filing or possession under subsection 6 of
section 33 of this act, before the beginning of the 20‑day period
thereunder.

3. Subject to subsection 5 and except as otherwise
provided in subsection 7, a perfected purchase-money security interest in
livestock that are farm products has priority over a conflicting security
interest in the same livestock, and, except as otherwise provided in section 48
of this act, a perfected security interest in their identifiable proceeds and
identifiable products in their unmanufactured states also has priority, if:

(a) The purchase-money security interest is perfected
when the debtor receives possession of the livestock;

(b) The purchase-money secured party sends an
authenticated notification to the holder of the conflicting security interest;

(c) The holder of the conflicting security interest receives
the notification within 6 months before the debtor receives possession of the
livestock; and

(d) The notification states that the person sending the
notification has or expects to acquire a purchase-money security interest in
livestock of the debtor and describes the livestock.

4. Paragraphs (b), (c) and (d) of subsection 3 apply
only if the holder of the conflicting security interest had filed a financing
statement covering the same types of livestock:

(a) If the purchase-money security interest is perfected
by filing, before the date of the filing; or

(b) If the purchase-money security interest is temporarily
perfected without filing or possession under subsection 6 of section 33 of this
act, before the beginning of the 20‑day period thereunder.

5. Except as otherwise provided in subsection 7, a
perfected purchase-money security interest in goods other than inventory or
livestock has priority over a conflicting security interest in the same goods,
and, except as otherwise provided in section 48 of this act, a perfected
security interest in its identifiable proceeds also has priority, if the
purchase-money security interest is perfected when the debtor receives
possession of the collateral or within 20 days thereafter.

6. Except as otherwise provided in subsection 7, a
perfected purchase-money security interest in software has priority over a
conflicting security interest in the same collateral, and, except as otherwise
provided in section 48 of this act, a perfected security interest in its
identifiable proceeds also has priority, to the extent that the purchase-money
security interest in the goods in which the software was acquired for use has
priority in the goods and proceeds of the goods under this section.

7. If more than one security interest qualifies for
priority in the same collateral under subsection 1, 3, 5 or 6:

(a) A security interest securing an obligation incurred
as all or part of the price of the collateral has priority over a security
interest securing an obligation incurred for value given to enable the debtor
to acquire rights in or the use of collateral; and

(b) In all other cases, subsection 1 of section 43 of
this act applies to the qualifying security interests.

Sec. 46. 1. Except as otherwise provided in
subsection 2, a security interest created by a debtor is subordinate to a
security interest in the same collateral created by another person if:

(a) The debtor acquired the collateral subject to the
security interest created by the other person;

(b) The security interest created by the other person
was perfected when the debtor acquired the collateral; and

(c) There is no period thereafter when the security
interest is unperfected.

2. Subsection 1 subordinates a security interest only
if the security interest:

(a) Otherwise would have priority solely under
subsection 1 of section 43 of this act or section 45 of this act; or

Sec. 47. 1. Subject to subsection 2, a security
interest created by a new debtor which is perfected by a filed financing
statement that is effective solely under section 80 of this act in collateral
in which a new debtor has or acquires rights is subordinate to a security
interest in the same collateral which is perfected other than by a filed
financing statement that is effective solely under that section.

2. The other provisions of this part determine the
priority among conflicting security interests in the same collateral perfected
by filed financing statements that are effective solely under section 80 of
this act. However, if the security agreements to which a new debtor became
bound as debtor were not entered into by the same original debtor, the
conflicting security interests rank according to priority in time of the new
debtor’s having become bound.

Sec. 48. The following rules govern priority
among conflicting security interests in the same deposit account:

1. A security interest held by a secured party having
control of the deposit account under section 5 of this act has priority over a
conflicting security interest held by a secured party that does not have
control.

2. Except as otherwise provided in subsections 3 and 4,
security interests perfected by control under section 35 of this act rank
according to priority in time of obtaining control.

3. Except as otherwise provided in subsection 4, a
security interest held by the bank with which the deposit account is maintained
has priority over a conflicting security interest held by another secured
party.

4. A security interest perfected by control under
paragraph (c) of subsection 1 of section 5 of this act has priority over a
security interest held by the bank with which the deposit account is
maintained.

Sec. 49. The following rules govern priority
among conflicting security interests in the same investment property:

1. A security interest held by a secured party having
control of investment property under section 7 of this act has priority over a
security interest held by a secured party that does not have control of the
investment property.

2. A security interest in a certificated security in
registered form which is perfected by taking delivery under subsection 1 of
section 34 of this act and not by control under section 35 of this act has
priority over a conflicting security interest perfected by a method other than
control.

3. Except as otherwise provided in subsections 4 and 5,
conflicting security interests held by secured parties each of which has
control under section 7 of this act rank according to priority in time of:

(a) If the collateral is a security, obtaining control;

(b) If the collateral is a security entitlement carried
in a securities account:

(1) The secured party’s becoming the person for
which the securities account is maintained, if the secured party obtained
control under paragraph (a) of subsection 4 of NRS 104.8106;

(2) The securities intermediary’s agreement to
comply with the secured party’s entitlement orders with respect to security
entitlements carried or to be carried in the securities account, if the secured
party obtained control under paragraph (b) of that subsection; or

(3) If the secured party obtained control through
another person under paragraph (c) of that subsection, the time on which
priority would be based under this paragraph if the other person were the
secured party; or

(c) If the collateral is a commodity contract carried
with a commodity intermediary, the satisfaction of the requirement for control
specified in paragraph (b) of subsection 2
of section 7 of this act with respect to commodity contracts carried or to be
carried with the commodity intermediary.

paragraph (b) of subsection 2 of section 7 of this act with
respect to commodity contracts carried or to be carried with the commodity
intermediary.

4. A security interest held by a securities
intermediary in a security entitlement or a securities account maintained with
the securities intermediary has priority over a conflicting security interest
held by another secured party.

5. A security interest held by a commodity intermediary
in a commodity contract or a commodity account maintained with the commodity
intermediary has priority over a conflicting security interest held by another
secured party.

6. Conflicting security interests granted by a broker,
securities intermediary, or commodity intermediary which are perfected without
control under section 7 of this act rank equally.

7. In all other cases, priority among conflicting security
interests in investment property is governed by sections 43 and 44 of this act.

Sec. 50. The following rules govern priority
among conflicting security interests in the same letter-of-credit right:

1. A security interest held by a secured party having
control of the letter-of-credit right under section 8 of this act has priority
to the extent of its control over a conflicting security interest held by a
secured party that does not have control.

2. Security interests perfected by control under
section 35 of this act rank according to priority in time of obtaining control.

Sec. 51. 1. A purchaser of chattel paper has
priority over a security interest in the chattel paper which is claimed merely
as proceeds of inventory subject to a security interest if:

(a) In good faith and in the ordinary course of the
purchaser’s business, the purchaser gives new value and takes possession of the
chattel paper or obtains control of the chattel paper under section 6 of this
act; and

(b) The chattel paper does not indicate that it has been
assigned to an identified assignee other than the purchaser.

2. A purchaser of chattel paper has priority over a
security interest in the chattel paper which is claimed other than merely as
proceeds of inventory subject to a security interest if the purchaser gives new
value and takes possession of the chattel paper or obtains control of the
chattel paper under section 6 of this act in good faith, in the ordinary course
of the purchaser’s business, and without knowledge that the purchase violates
the rights of the secured party.

3. Except as otherwise provided in section 48 of this
act, a purchaser having priority in chattel paper under subsection 1 or 2 also
has priority in proceeds of the chattel paper to the extent that:

(a) Section 43 of this act provides for priority in the
proceeds; or

(b) The proceeds consist of the specific goods covered
by the chattel paper or cash proceeds of the specific goods, even if the
purchaser’s security interest in the proceeds is unperfected.

4. Except as otherwise provided in subsection 1 of
section 52 of this act, a purchaser of an instrument has priority over a
security interest in the instrument perfected by a method other than possession
if the purchaser gives value and takes possession
of the instrument in good faith and without knowledge that the purchase
violates the rights of the secured party.

gives value and takes possession of the instrument in good
faith and without knowledge that the purchase violates the rights of the
secured party.

5. For purposes of subsections 1 and 2, the holder of a
purchase-money security interest in inventory gives new value for chattel paper
constituting proceeds of the inventory.

6. For purposes of subsections 2 and 4, if chattel
paper or an instrument indicates that it has been assigned to an identified
secured party other than the purchaser, a purchaser of the chattel paper or
instrument has knowledge that the purchase violates the rights of the secured
party.

Sec. 52. 1. This article does not limit the
rights of a holder in due course of a negotiable instrument, a holder to which
a negotiable document of title has been duly negotiated, or a protected
purchaser of a security. These holders or purchasers take priority over an
earlier security interest, even if perfected, to the extent provided in
Articles 3, 7 and 8.

2. This article does not limit the rights of or impose
liability on a person to the extent that the person is protected against the
assertion of an adverse claim under Article 8.

3. Filing under this article does not constitute notice
of a claim or defense to the holders, or purchasers, or persons described in
subsections 1 and 2.

Sec. 53. 1. A transferee of money takes the
money free of a security interest unless the transferee acts in collusion with
the debtor in violating the rights of the secured party.

2. A transferee of funds from a deposit account takes
the funds free of a security interest in the deposit account unless the
transferee acts in collusion with the debtor in violating the rights of the
secured party.

Sec. 54. 1. In this section, “possessory lien”
means an interest, other than a security interest or an agricultural lien:

(a) Which secures payment or performance of an
obligation for services or materials furnished with respect to goods by a
person in the ordinary course of his business;

(b) Which is created by statute or rule of law in his
favor; and

(c) Whose effectiveness depends on his possession of the
goods.

2. A possessory lien on goods has priority over a
security interest in the goods unless the lien is created by a statute that
expressly provides otherwise.

Sec. 55. 1. A security interest under this
article may be created in goods that are fixtures or may continue in goods that
become fixtures. A security interest does not exist under this article in
ordinary building materials incorporated into an improvement on land.

2. This article does not prevent creation of an
encumbrance upon fixtures under real property law.

3. In cases not governed by subsections 4 to 8,
inclusive, a security interest in fixtures is subordinate to a conflicting
interest of an encumbrancer or owner of the related real property other than
the debtor.

4. Except as otherwise provided in subsection 8, a
perfected security interest in fixtures has priority over a conflicting
interest of an encumbrancer or owner of the real property if the debtor has an
interest of record in or is in possession of the real property and:

(a) The security interest is a purchase-money security
interest;

(b) The interest of the encumbrancer or owner arises
before the goods become fixtures; and

(c) The security interest is perfected by a fixture
filing before the goods become fixtures or within 20 days thereafter.

5. A perfected security interest in fixtures has
priority over a conflicting interest of an encumbrancer or owner of the real
property if:

(a) The debtor has an interest of record in the real
property or is in possession of the real property and the security interest:

(1) Is perfected by a fixture filing before the
interest of the encumbrancer or owner is of record; and

(2) Has priority over any conflicting interest of a
predecessor in title of the encumbrancer or owner;

(b) Before the goods become fixtures, the security
interest is perfected by any method permitted by this article and the fixtures
are readily removable:

(1) Factory or office machines;

(2) Equipment that is not primarily used or leased
for use in the operation of the real property; or

(3) Replacements of domestic appliances that are
consumer goods;

(c) The conflicting interest is a lien on the real
property obtained by legal or equitable proceedings after the security interest
was perfected by any method permitted by this article; or

(d) The security interest is:

(1) Created in a manufactured home in a
manufactured-home transaction; and

(2) Perfected pursuant to a statute described in
paragraph (b) of subsection 1 of section 32 of this act.

6. A security interest in fixtures, whether or not
perfected, has priority over a conflicting interest of an encumbrancer or owner
of the real property if:

(a) The encumbrancer or owner has, in an authenticated
record, consented to the security interest or disclaimed an interest in the
goods as fixtures; or

(b) The debtor has a right to remove the goods as
against the encumbrancer or owner.

7. The priority of the security interest under
subsection 6 continues for a reasonable time if the debtor’s right to remove
the goods as against the encumbrancer or owner terminates.

8. A mortgage is a construction mortgage to the extent
that it secures an obligation incurred for the construction of an improvement
on land, including the acquisition cost of the land, if the recorded record so
indicates. Except as otherwise provided in subsections 5 and 6, a security
interest in fixtures is subordinate to a construction mortgage recorded before
the goods become fixtures if the goods become fixtures before the completion of the construction.

completion of the construction. A mortgage has this priority
to the same extent as a construction mortgage to the extent that it is given to
refinance a construction mortgage.

9. A perfected security interest in crops growing on
real property has priority over a conflicting interest of an encumbrancer or
owner of the real property if the debtor has an interest of record in or is in
possession of the real property.

Sec. 56. 1. A security interest may be created
in an accession and continues in collateral that becomes an accession.

2. If a security interest is perfected when the
collateral becomes an accession, the security interest remains perfected in the
collateral.

3. Except as otherwise provided in subsection 4, the
other provisions of this part determine the priority of a security interest in
an accession.

4. A security interest in an accession is subordinate
to a security interest in the whole which is perfected by compliance with the
requirements of a certificate-of-title statute under subsection 2 of section 32
of this act.

5. After default, subject to part 6, a secured party
may remove an accession from other goods if the security interest in the
accession has priority over the claims of every person having an interest in
the whole.

6. A secured party that removes an accession from other
goods under subsection 5 shall promptly reimburse any holder of a security
interest or other lien on, or owner of, the whole or of the other goods, other
than the debtor, for the cost of repair of any physical injury to the whole or
the other goods. The secured party need not reimburse the holder or owner for
any diminution in value of the whole or the other goods caused by the absence
of the accession removed or by any necessity for replacing it. A person
entitled to reimbursement may refuse permission to remove until the secured
party gives adequate assurance for the performance of the obligation to
reimburse.

Sec. 57. 1. In this section, “commingled goods”
means goods that are physically united with other goods in such a manner that
their identity is lost in a product or mass.

2. A security interest does not exist in commingled
goods as such. However, a security interest may attach to a product or mass
that results when goods become commingled goods.

3. If collateral becomes commingled goods, a security
interest attaches to the product or mass.

4. If a security interest in collateral is perfected
before the collateral becomes commingled goods, the security interest that
attaches to the product or mass under subsection 3 is perfected.

5. Except as otherwise provided in subsection 6, the
other provisions of this part determine the priority of a security interest
that attaches to the product or mass under subsection 3.

6. If more than one security interest attaches to the
product or mass under subsection 3, the following rules determine priority:

(a) A security interest that is perfected under
subsection 4 has priority over a security interest that is unperfected at the
time the collateral becomes commingled goods.

(b) If more than one security interest is perfected
under subsection 4, the security interests rank equally in proportion to value
of the collateral at the time it became commingled goods.

Sec. 58. If, while a security interest in goods
is perfected by any method under the law of another jurisdiction, this state
issues a certificate of title that does not show that the goods are subject to
the security interest or contain a statement that they may be subject to
security interests not shown on the certificate:

1. A buyer of the goods, other than a person in the
business of selling goods of that kind, takes free of the security interest if
the buyer gives value and receives delivery of the goods after issuance of the
certificate and without knowledge of the security interest; and

2. The security interest is subordinate to a
conflicting security interest in the goods that attaches, and is perfected
under subsection 2 of section 32 of this act, after issuance of the certificate
and without the conflicting secured party’s knowledge of the security interest.

Sec. 59. If a security interest or agricultural
lien is perfected by a filed financing statement providing information
described in paragraph (e) of subsection 2 of section 88 of this act which is
incorrect at the time the financing statement is filed:

1. The security interest or agricultural lien is
subordinate to a conflicting perfected security interest in the collateral to
the extent that the holder of the conflicting security interest gives value in
reasonable reliance upon the incorrect information; and

2. A purchaser, other than a secured party, of the
collateral takes free of the security interest or agricultural lien to the
extent that, in reasonable reliance upon the incorrect information, the
purchaser gives value and, in the case of chattel paper, documents, goods,
instruments, or a security certificate, receives delivery of the collateral.

Sec. 60. This article does not preclude
subordination by agreement by a person entitled to priority.

Sec. 61. 1. Except as otherwise provided in
subsection 3, a bank with which a deposit account is maintained may exercise
any right of recoupment or set-off against a secured party that holds a
security interest in the deposit account.

2. Except as otherwise provided in subsection 3, the
application of this article to a security interest in a deposit account does
not affect a right of recoupment or set-off of the secured party as to a
deposit account maintained with the secured party.

3. The exercise by a bank of a set-off against a
deposit account is ineffective against a secured party that holds a security
interest in the deposit account which is perfected by control under paragraph
(c) of subsection 1 of section 5 of this act, if the set-off is based on a
claim against the debtor.

Sec. 62. Except as otherwise provided in
subsection 3 of section 61 of this act, and unless the bank otherwise agrees in
an authenticated record, a bank’s rights and duties with respect to a deposit
account maintained with the bank are not terminated, suspended, or modified by:

1. The creation, attachment, or perfection of a
security interest in the deposit account;

2. The bank’s knowledge of the security interest; or

3. The bank’s receipt of instructions from the secured
party.

Sec. 63. This article does not require a bank to
enter into an agreement of the kind described in paragraph (b) of subsection 1
of section 5 of this act, even if its customer so requests or directs. A bank
that has entered into such an agreement is not required to confirm the
existence of the agreement to another person unless requested to do so by its
customer.

Sec. 64. 1. Except as otherwise provided in
subsection 2 and sections 7, 8, 9 and 10 of this act, whether a debtor’s rights
in collateral may be voluntarily or involuntarily transferred is governed by
law other than this article.

2. An agreement between the debtor and secured party
which prohibits a transfer of the debtor’s rights in collateral or makes the
transfer a default does not prevent the transfer from taking effect.

Sec. 65. The existence of a security interest,
agricultural lien, or authority given to a debtor to dispose of or use
collateral, without more, does not impose upon a secured party liability in
contract or tort for the debtor’s acts or omissions.

Sec. 66. 1. In this section, “value” has the
meaning provided in subsection 1 of NRS 104.3303.

2. Except as otherwise provided in this section, an
agreement between an account debtor and an assignor not to assert against an
assignee any claim or defense that the account debtor may have against the
assignor is enforceable by an assignee that takes an assignment:

(a) For value;

(b) In good faith;

(c) Without notice of a claim of a property or
possessory right to the property assigned; and

(d) Without notice of a defense or claim in recoupment
of the type that may be asserted against a person entitled to enforce a
negotiable instrument under subsection 1 of NRS 104.3305.

3. An agreement described in subsection 2 is not
enforceable with respect to defenses of a type that may be asserted against a
holder in due course of a negotiable instrument under subsection 2 of NRS
104.3305.

4. In a consumer transaction, if a record evidences the
account debtor’s obligation, law other than this article requires that the
record include a statement to the effect that the rights of an assignee are
subject to claims or defenses that the account debtor could assert against the
original obligee, and the record does not include such a statement:

(a) The record has the same effect as if the record
included such a statement; and

(b) The account debtor may assert against an assignee
those claims and defenses that would have been available if the record included
such a statement.

5. This section is subject to law other than this
article which establishes a different rule for an account debtor who is a
natural person and who incurred the obligation primarily for personal, family,
or household purposes.

6. Except as otherwise provided in subsection 4, this
section does not displace law other than this article which gives effect to an
agreement by an account debtor not to assert a claim or defense against an
assignee.

Sec. 67. 1. Unless an account debtor has made an
enforceable agreement not to assert defenses or claims, and subject to
subsections 2 to 5, inclusive, the rights of an assignee are subject to:

(a) All terms of the agreement between the account
debtor and assignor and any defense or claim in recoupment arising from the
transaction that gave rise to the contract; and

(b) Any other defense or claim of the account debtor
against the assignor which accrues before the account debtor receives a
notification of the assignment authenticated by the assignor or the assignee.

2. Subject to subsection 3 and except as otherwise
provided in subsection 4, the claim of an account debtor against an assignor
may be asserted against an assignee under subsection 1 only to reduce the amount
the account debtor owes.

3. This section is subject to law other than this
article which establishes a different rule for an account debtor who is a
natural person and who incurred the obligation primarily for personal, family,
or household purposes.

4. In a consumer transaction, if a record evidences the
account debtor’s obligation, law other than this article requires that the
record include a statement to the effect that the account debtor’s recovery
against an assignee with respect to claims and defenses against the assignor
may not exceed amounts paid by the account debtor under the record, and the
record does not include such a statement, the extent to which a claim of an
account debtor against the assignor may be asserted against an assignee is
determined as if the record included such a statement.

5. This section does not apply to an assignment of a
health-care-insurance receivable.

Sec. 68. 1. A modification of or substitution
for an assigned contract is effective against an assignee if made in good
faith. The assignee acquires corresponding rights under the modified or
substituted contract. The assignment may provide that the modification or
substitution is a breach of contract by the assignor. This subsection is
subject to subsections 2, 3 and 4.

2. Subsection 1 applies to the extent that:

(a) The right to payment or a part thereof under an
assigned contract has not been fully earned by performance; or

(b) The right to payment or a part thereof has been
fully earned by performance and the account debtor has not received
notification of the assignment under subsection 1 of section 69 of this act.

3. This section is subject to law other than this
article which establishes a different rule for an account debtor who is a
natural person and who incurred the obligation primarily for personal, family,
or household purposes.

4. This section does not apply to an assignment of a
health-care-insurance receivable.

Sec. 69. 1. Subject to subsections 2 to 8,
inclusive, an account debtor on an account, chattel paper, or a payment
intangible may discharge its obligation by paying the assignor until, but not
after, the account debtor receives a notification, authenticated by the
assignor or the assignee, that the amount due or to become due has been
assigned and that payment is to be made to the assignee. After receipt of the
notification, the account debtor may discharge its obligation by paying the
assignee and may not discharge the obligation by paying the assignor.

(b) To the extent that an agreement between an account
debtor and a seller of a payment intangible limits the account debtor’s duty to
pay a person other than the seller and the limitation is effective under law
other than this article; or

(c) At the option of an account debtor, if the
notification notifies the account debtor to make less than the full amount of
any installment or other periodic payment to the assignee, even if:

(1) Only a portion of the account, chattel paper,
or general intangible has been assigned to that assignee;

(2) A portion has been assigned to another
assignee; or

(3) The account debtor knows that the assignment to
that assignee is limited.

3. Subject to subsection 8, if requested by the account
debtor, an assignee shall seasonably furnish reasonable proof that the
assignment has been made. Unless the assignee complies, the account debtor may
discharge its obligation by paying the assignor, even if the account debtor has
received a notification under subsection 1.

4. Except as otherwise provided in subsection 5 and NRS
104A.2303 and section 70 of this act, and subject to subsection 8, a term in an
agreement between an account debtor and an assignor or in a promissory note is
ineffective to the extent that it:

(a) Prohibits, restricts, or requires the consent of the
account debtor or person obligated on the promissory note to the assignment or
transfer of, or the creation, attachment, perfection, or enforcement of a
security interest in, the account, chattel paper, payment intangible, or
promissory note; or

(b) Provides that the creation, attachment, perfection,
or enforcement of the security interest may give rise to a default, breach,
right of recoupment, claim, defense, termination, right of termination, or
remedy under the account, chattel paper, payment intangible, or promissory
note.

5. Subsection 4 does not apply to the sale of a payment
intangible or promissory note.

6. Subject to subsections 7 and 8, a rule of law,
statute, or regulation, that prohibits, restricts, or requires the consent of a
government, governmental body or official, or account debtor to the assignment
or transfer of, or creation of a security interest in, an account or chattel
paper is ineffective to the extent that the rule of law, statute, or
regulation:

(a) Prohibits, restricts, or requires the consent of the
government, governmental body or official, or account debtor to the assignment
or transfer of, or the creation, attachment, perfection, or enforcement of a
security interest in, the account or chattel paper; or

(b) Provides that the creation, attachment, perfection,
or enforcement of the security interest may give rise to a default, breach,
right of recoupment, claim, defense, termination, right of termination, or
remedy under the account or chattel paper.

7. Subject to subsection 8, an account debtor may not
waive or vary its option under paragraph (c) of subsection 2.

8. This section is subject to law other than this
article which establishes a different rule for an account debtor who is an
individual and who incurred the obligation primarily for personal, family, or
household purposes.

9. This section does not apply to an assignment of a
health-care-insurance receivable.

Sec. 70. 1. Except as otherwise provided in
subsection 2, a term in a lease agreement is ineffective to the extent that it:

(a) Prohibits, restricts, or requires the consent of a party
to the lease to the creation, attachment, perfection, or enforcement of a
security interest in an interest of a party under the lease contract or in the
lessor’s residual interest in the goods; or

(b) Provides that the creation, attachment, perfection,
or enforcement of the security interest may give rise to a default, breach,
right of recoupment, claim, defense, termination, right of termination, or
remedy under the lease.

2. Except as otherwise provided in subsection 7 of NRS
104A.2303, a term described in paragraph (b) of subsection 1 is effective to
the extent that there is:

(a) A transfer by the lessee of the lessee’s right of
possession or use of the goods in violation of the term; or

(b) A delegation of a material performance of either
party to the lease contract in violation of the term.

3. The creation, attachment, perfection, or enforcement
of a security interest in the lessor’s interest under the lease contract or the
lessor’s residual interest in the goods is not a transfer that materially
impairs the lessee’s prospect of obtaining return performance or materially
changes the duty of or materially increases the burden or risk imposed on the
lessee within the purview of subsection 4 of NRS 104A.2303 unless, and then
only to the extent that, enforcement results in a delegation of a material
performance of the lessor. Even in that event, the creation, attachment,
perfection, and enforcement of the security interest remain effective.

Sec. 71. 1. Except as otherwise provided in
subsection 2, a term in a promissory note or in an agreement between an account
debtor and a debtor which relates to a health-care-insurance receivable or a
general intangible, including a contract, permit, license, or franchise, and
prohibits, restricts, or requires the consent of the person obligated on the
promissory note or the account debtor to, the assignment or transfer of, or
creation, attachment, or perfection of a security interest in, the promissory
note, health-care-insurance receivable, or general intangible, is ineffective
to the extent that the term:

(a) Would impair the creation, attachment, or perfection
of a security interest; or

(b) Provides that the creation, attachment, or
perfection of the security interest may give rise to a default, breach, right
of recoupment, claim, defense, termination, right of termination, or remedy
under the promissory note, health-care-insurance receivable, or general
intangible.

2. Subsection 1 applies to a security interest in a
payment intangible or promissory note only if the security interest arises out
of a sale of the payment intangible or promissory note.

3. A rule of law, statute, or regulation that
prohibits, restricts, or requires the consent of a government, governmental
body or official, person obligated on a promissory note, or account debtor to
the assignment or transfer of, or creation of a security interest in, a promissory
note, health-care-insurance receivable, or general intangible, including a
contract, permit, license, or franchise between an account debtor and a debtor,
is ineffective to the extent that the rule of law, statute, or regulation:

(a) Would impair the creation, attachment, or perfection
of a security interest; or

(b) Provides that the creation, attachment, or
perfection of the security interest may give rise to a default, breach, right
of recoupment, claim, defense, termination, right of termination, or remedy
under the promissory note, health-care-insurance receivable, or general
intangible.

4. To the extent that a term in a promissory note or in
an agreement between an account debtor and a debtor which relates to a
health-care-insurance receivable or general intangible or a rule of law,
statute, or regulation described in subsection 3 would be effective under law
other than this article but is ineffective under subsection 1 or 3, the
creation, attachment, or perfection of a security interest in the promissory
note, health-care-insurance receivable, or general intangible:

(a) Is not enforceable against the person obligated on
the promissory note or the account debtor;

(b) Does not impose a duty or obligation on the person
obligated on the promissory note or the account debtor;

(c) Does not require the person obligated on the
promissory note or the account debtor to recognize the security interest, pay
or render performance to the secured party, or accept payment or performance
from the secured party;

(d) Does not entitle the secured party to use or assign
the debtor’s rights under the promissory note, health-care-insurance
receivable, or general intangible, including any related information or
materials furnished to the debtor in the transaction giving rise to the
promissory note, health-care-insurance receivable, or general intangible;

(e) Does not entitle the secured party to use, assign,
possess, or have access to any trade secrets or confidential information of the
person obligated on the promissory note or the account debtor; and

(f) Does not entitle the secured party to enforce the
security interest in the promissory note, health-care-insurance receivable, or
general intangible.

Sec. 72. 1. A term in a letter of credit or a
rule of law, statute, regulation, custom, or practice applicable to the letter
of credit which prohibits, restricts, or requires the consent of an applicant,
issuer, or nominated person to a beneficiary’s assignment of or creation of a
security interest in a letter-of-credit right is ineffective to the extent that
the term or rule of law, statute, regulation, custom, or practice:

(a) Would impair the creation, attachment, or perfection
of a security interest in the letter-of-credit right; or

(b) Provides that the creation, attachment, or
perfection of the security interest may give rise to a default, breach, right
of recoupment, claim, defense, termination, right of termination, or remedy
under the letter-of-credit right.

2. To the extent that a term in a letter of credit is
ineffective under subsection 1 but would be effective under law other than this
article or a custom or practice applicable to the letter of credit, to the
transfer of a right to draw or otherwise demand performance under the letter of
credit, or to the assignment of a right to proceeds of the letter of credit,
the creation, attachment, or perfection of a security interest in the
letter-of-credit right:

(a) Is not enforceable against the applicant, issuer,
nominated person, or transferee beneficiary;

(b) Imposes no duties or obligations on the applicant,
issuer, nominated person, or transferee beneficiary; and

(c) Does not require the applicant, issuer, nominated
person, or transferee beneficiary to recognize the security interest, pay or
render performance to the secured party, or accept payment or other performance
from the secured party.

Sec. 73. 1. Except as otherwise provided in
subsection 2, if the law of this state governs perfection of a security
interest or agricultural lien, the office in which to file a financing
statement to perfect the security interest or agricultural lien is:

(a) The office designated for the filing or recording of
a mortgage on the real property, if:

(1) The collateral is as-extracted collateral or
timber to be cut; or

(2) The financing statement is filed as a fixture
filing and the collateral is goods that are or are to become fixtures; or

(b) The office of the secretary of state in all other
cases, including a case in which the collateral is goods that are or are to
become fixtures and the financing statement is not filed as a fixture filing.

2. The office in which to file a financing statement to
perfect a security interest in collateral, including fixtures, of a
transmitting utility is the office of the secretary of state or the county
recorder of the appropriate county, as determined pursuant to chapter 105 of
NRS. The financing statement also constitutes a fixture filing as to the
collateral indicated in the financing statement which is or is to become
fixtures.

Sec. 74. 1. Subject to subsection 2, a financing
statement is sufficient only if it:

(a) Provides the name of the debtor;

(b) Provides the name of the secured party or a
representative of the secured party; and

(c) Indicates the collateral covered by the financing
statement.

2. Except as otherwise provided in subsection 2 of
section 73 of this act, to be sufficient, a financing statement that covers
as-extracted collateral or timber to be cut, or which is filed as a fixture
filing and covers goods that are or are to become fixtures, must satisfy
subsection 1 and also:

(a) Indicate that it covers this type of collateral;

(b) Indicate that it is to be filed for record in the
real property records;

(c) Provide a description of the real property to which
the collateral is related sufficient to give constructive notice of the
mortgage under the law of this state if the description were contained in a
mortgage of the real property; and

(d) If the debtor does not have an interest of record in
the real property, provide the name of a record owner.

3. A record of a mortgage is effective, from the date
of recording, as a financing statement filed as a fixture filing or as a
financing statement covering as-extracted collateral or timber to be cut only
if:

(a) The record indicates the goods or accounts that it
covers;

(b) The goods are or are to become fixtures related to
the real property described in the mortgage or the collateral is related to the
real property described in the mortgage and is as-extracted collateral or
timber to be cut;

(c) The record satisfies the requirements for a
financing statement in this section other than an indication that it is to be
filed in the real property records; and

(d) The mortgage is recorded.

4. A financing statement may be filed before a security
agreement is made or a security interest otherwise attaches.

Sec. 75. 1. A financing statement sufficiently
provides the name of the debtor:

(a) If the debtor is a registered organization, only if
the financing statement provides the name of the debtor indicated on the public
record of the debtor’s jurisdiction of organization which shows the debtor to
have been organized;

(b) If the debtor is a decedent’s estate, only if the
financing statement provides the name of the decedent and indicates that the
debtor is an estate;

(c) If the debtor is a trust or a trustee acting with
respect to property held in trust, only if the financing statement:

(1) Provides the name specified for the trust in
its organic documents or, if no name is specified, provides the name of the
settlor and additional information sufficient to distinguish the debtor from
other trusts having one or more of the same settlors; and

(2) Indicates, in the debtor’s name or otherwise,
that the debtor is a trust or is a trustee acting with respect to property held
in trust; and

(d) In other cases:

(1) If the debtor has a name, only if it provides
the name of the debtor as a natural person or an organization; and

(2) If the debtor does not have a name, only if it
provides the names of the partners, members, associates, or other persons comprising
the debtor.

2. A financing statement that provides the name of the
debtor in accordance with subsection 1 is not rendered ineffective by the
absence of:

(a) A trade name or other name of the debtor; or

(b) Unless required under subparagraph (2) of paragraph
(d) of subsection 1, names of partners, members, associates, or other persons
comprising the debtor.

3. A financing statement that provides only the
debtor’s trade name does not sufficiently provide the name of the debtor.

4. Failure to indicate the representative capacity of a
secured party or representative of a secured party does not affect the
sufficiency of a financing statement.

5. A financing statement may provide the name of more
than one debtor and the name of more than one secured party.

Sec. 76. A financing statement sufficiently
indicates the collateral that it covers only if the financing statement
provides:

1. A description of the collateral pursuant to section
9 of this act; or

2. An indication that the financing statement covers
all assets or all personal property.

Sec. 77. 1. A consignor, lessor, or other bailor
of goods, a licensor, or a buyer of a payment intangible or promissory note may
file a financing statement, or may comply with a statute or treaty described in
subsection 1 of section 32 of this act, using the terms “consignor,”
“consignee,” “lessor,” “lessee,” “bailor,” “bailee,” “licensor,” “licensee,”
“owner,” “registered owner,” “buyer,” “seller,” or words of similar import,
instead of the terms “secured party” and “debtor.”

2. This part applies to the filing of a financing
statement under subsection 1 and, as appropriate, to compliance that is
equivalent to filing a financing statement under subsection 2 of section 32 of
this act, but the filing or compliance is not of itself a factor in determining
whether the collateral secures an obligation. If it is determined for another
reason that the collateral secures an obligation, a security interest held by
the consignor, lessor, bailor, licensor,
owner, or buyer which attaches to the collateral is perfected by the filing or
compliance.

consignor, lessor, bailor, licensor, owner, or buyer which
attaches to the collateral is perfected by the filing or compliance.

Sec. 78. 1. A financing statement substantially
satisfying the requirements of this part is effective, even if it has minor
errors or omissions, unless the errors or omissions make the financing
statement seriously misleading.

2. Except as otherwise provided in subsection 3, a
financing statement that fails sufficiently to provide the name of the debtor
in accordance with subsection 1 of section 75 of this act is seriously
misleading.

3. If a search of the records of the filing office
under the debtor’s correct name, using the filing office’s standard search
logic, if any, would disclose a financing statement that fails sufficiently to
provide the name of the debtor in accordance with subsection 1 of section 75 of
this act, the name provided does not make the financing statement seriously
misleading.

4. For purposes of subsection 2 of section 80 of this
act, the “debtor’s correct name” in subsection 3 means the correct name of the
new debtor.

Sec. 79. 1. A filed financing statement remains
effective with respect to collateral that is sold, exchanged, leased, licensed,
or otherwise disposed of and in which a security interest or agricultural lien
continues, even if the secured party knows of or consents to the disposition.

2. Except as otherwise provided in subsection 3 and
section 80 of this act, a financing statement is not rendered ineffective if,
after the financing statement is filed, the information provided in the
financing statement becomes seriously misleading under section 78 of this act.

3. If a debtor so changes its name that a filed
financing statement becomes seriously misleading under section 78 of this act:

(a) The financing statement is effective to perfect a
security interest in collateral acquired by the debtor before, or within 4
months after, the change; and

(b) The financing statement is not effective to perfect
a security interest in collateral acquired by the debtor more than 4 months
after the change, unless an amendment to the financing statement which renders
the financing statement not seriously misleading is filed within 4 months after
the change.

Sec. 80. 1. Except as otherwise provided in this
section, a filed financing statement naming an original debtor is effective to
perfect a security interest in collateral in which a new debtor has or acquires
rights to the extent that the financing statement would have been effective had
the original debtor acquired rights in the collateral.

2. If the difference between the name of the original
debtor and that of the new debtor causes a filed financing statement that is
effective under subsection 1 to be seriously misleading under section 78 of
this act:

(a) The financing statement is effective to perfect a
security interest in collateral acquired by the new debtor before, and within 4
months after, the new debtor becomes bound under subsection 4 of section 14 of
this act; and

(b) The financing statement is not effective to perfect
a security interest in collateral acquired by the new debtor more than 4 months
after the new debtor becomes bound under subsection 4 of section 14 of this act
unless an initial financing statement providing the name of the new debtor is
filed before the expiration of that time.

3. This section does not apply to collateral as to
which a filed financing statement remains effective against the new debtor
under subsection 1 of section 79 of this act.

Sec. 81. 1. A person may file an initial
financing statement, amendment that adds collateral covered by a financing
statement, or amendment that adds a debtor to a financing statement only if:

(a) The debtor authorizes the filing in an authenticated
record; or

(b) The person holds an agricultural lien that has
become effective at the time of filing and the financing statement covers only
collateral in which he holds an agricultural lien.

2. By authenticating or becoming bound as debtor by a
security agreement, a debtor or new debtor authorizes the filing of an initial
financing statement, and an amendment, covering:

(a) The collateral described in the security agreement;
and

(b) Property that becomes collateral under paragraph (b)
of subsection 1 of section 36 of this act, whether or not the security
agreement expressly covers proceeds.

3. A person may file an amendment other than an
amendment that adds collateral covered by a financing statement or an amendment
that adds a debtor to a financing statement only if:

(a) The secured party of record authorizes the filing;
or

(b) The change is a termination statement for a
financing statement as to which the secured party of record has failed to file
or send a termination statement as required by subsection 1 or 3 of section 85
of this act.

4. If there is more than one secured party of record
for a financing statement, each secured party of record may authorize the
filing of an amendment under subsection 3.

Sec. 82. 1. Subject to subsection 3, a filed
record is effective only to the extent that it was filed by a person that may
file it under section 81 of this act.

2. A record authorized by one secured party of record
does not affect the financing statement with respect to another secured party
of record.

3. If a person may file a termination statement only
under paragraph (b) of subsection 3 of section 81 of this act, the filed
termination statement is effective only if the debtor authorizes the filing and
the termination statement indicates that the debtor authorized it to be filed.

4. A continuation statement that is not filed within
the 6-month period prescribed by subsection 4 of section 87 of this act is
ineffective.

Sec. 83. 1. A secured party of record with
respect to a financing statement is a person whose name is provided as the name
of the secured party or a representative of the secured party in an initial
financing statement that has been filed. If an initial financing statement is
filed under subsection 1 of section 86 of this act, the assignee named in the initial financing statement is the secured party of record with
respect to the financing statement.

initial financing statement is the secured party of record
with respect to the financing statement.

2. If an amendment of a financing statement which
provides the name of a person as a secured party or a representative of a
secured party is filed, the person named in the amendment is a secured party of
record. If an amendment is filed under subsection 2 of section 86 of this act,
the assignee named in the amendment is a secured party of record.

3. A person remains a secured party of record until the
filing of an amendment of the financing statement which deletes him.

(a) Identifies, by its file number, the initial
financing statement to which the amendment relates; and

(b) If the amendment relates to an initial financing
statement filed or recorded in a filing office described in paragraph (a) of
subsection 1 of section 73 of this act, provides the date that the initial
financing statement was filed or recorded and the information specified in
subsection 2 of section 74 of this act.

2. Except as otherwise provided in section 87 of this
act, the filing of an amendment does not extend the period of effectiveness of
the financing statement.

3. A financing statement that is amended by an
amendment that adds collateral is effective as to the added collateral only
from the date of the filing of the amendment.

4. A financing statement that is amended by an
amendment that adds a debtor is effective as to the added debtor only from the
date of the filing of the amendment.

5. An amendment is ineffective to the extent it:

(a) Purports to delete all debtors and fails to provide
the name of a debtor to be covered by the financing statement; or

(b) Purports to delete all secured parties of record and
fails to provide the name of a new secured party of record.

Sec. 85. 1. A secured party shall cause the
secured party of record for a financing statement to file a termination
statement for the financing statement if the financing statement covers
consumer goods and:

(a) There is no obligation secured by the collateral
covered by the financing statement and no commitment to make an advance, incur
an obligation, or otherwise give value; or

(b) The debtor did not authorize the filing of the
initial financing statement.

2. To comply with subsection 1, a secured party shall
cause the secured party of record to file the termination statement:

(a) Within 1 month after there is no obligation secured
by the collateral covered by the financing statement and no commitment to make
an advance, incur an obligation, or otherwise give value; or

(b) If earlier, within 20 days after the secured party
receives an authenticated demand from a debtor.

3. In cases not governed by subsection 1, within 20
days after a secured party receives an authenticated demand from a debtor, the
secured party shall cause the secured party of record for a financing statement
to send to the debtor a termination statement for the financing statement or
file the termination statement in the filing office if:

(a) Except in the case of a financing statement covering
accounts or chattel paper that has been sold or goods that are the subject of a
consignment, there is no obligation secured by the collateral covered by the
financing statement and no commitment to make an advance, incur an obligation,
or otherwise give value;

(b) The financing statement covers accounts or chattel
paper that has been sold but as to which the account debtor or other person
obligated has discharged its obligation;

(c) The financing statement covers goods that were the
subject of a consignment to the debtor but are not in the debtor’s possession;
or

(d) The debtor did not authorize the filing of the
initial financing statement.

4. Except as otherwise provided in section 82 of this
act, upon the filing of a termination statement with the filing office, the
financing statement to which the termination statement relates ceases to be
effective.

Sec. 86. 1. Except as otherwise provided in
subsection 3, an initial financing statement may reflect an assignment of all
of the secured party’s power to authorize an amendment to the financing
statement by providing the name and mailing address of the assignee as the name
and address of the secured party.

2. Except as otherwise provided in subsection 3, a
secured party of record may assign of record all or part of its power to
authorize an amendment to a financing statement by filing in the filing office
an amendment of the financing statement which:

(a) Identifies, by its file number, the initial
financing statement to which it relates;

(b) Provides the name of the assignor; and

(c) Provides the name and mailing address of the
assignee.

3. An assignment of record of a security interest in a
fixture covered by a mortgage of real property which is effective as a fixture
filing under section 74 of this act may be made only by an assignment of record
of the mortgage in the manner provided by law of this state other than the
Uniform Commercial Code.

Sec. 87. 1. Except as otherwise provided in
subsections 2, 5, 6 and 7, a filed financing statement is effective for a
period of 5 years after the date of filing.

2. Except as otherwise provided in subsections 5, 6 and
7, an initial financing statement filed in connection with a public-finance
transaction or manufactured-home transaction is effective for a period of 30
years after the date of filing if it indicates that it is filed in connection
with a public-finance transaction or manufactured-home transaction.

3. The effectiveness of a filed financing statement
lapses on the expiration of the period of its effectiveness unless before the
lapse a continuation statement is filed pursuant to subsection 4. Upon lapse, a
financing statement ceases to be effective
and any security interest or agricultural lien that was perfected by the
financing statement becomes unperfected, unless the security interest is
perfected otherwise.

financing statement ceases to be effective and any security
interest or agricultural lien that was perfected by the financing statement
becomes unperfected, unless the security interest is perfected otherwise. If
the security interest or agricultural lien becomes unperfected upon lapse, it
is deemed never to have been perfected as against a purchaser of the collateral
for value.

4. A continuation statement may be filed only within 6
months before the expiration of the 5-year period specified in subsection 1 or
the 30-year period specified in subsection 2, whichever is applicable.

5. Except as otherwise provided in section 82 of this
act, upon timely filing of a continuation statement, the effectiveness of the
initial financing statement continues for a period of 5 years commencing on the
day on which the financing statement would have become ineffective in the
absence of the filing. Upon the expiration of the 5-year period, the financing
statement lapses in the same manner as provided in subsection 3, unless, before
the lapse, another continuation statement is filed pursuant to subsection 4.
Succeeding continuation statements may be filed in the same manner to continue
the effectiveness of the initial financing statement.

6. If a debtor is a transmitting utility and a filed
financing statement so indicates, the financing statement is effective until a
termination statement is filed.

7. A real property mortgage that is effective as a
fixture filing under subsection 3 of section 74 of this act remains effective
as a fixture filing until the mortgage is released or satisfied of record or
its effectiveness otherwise terminates as to the real property.

Sec. 88. 1. Except as otherwise provided in
subsection 2, communication of a record to a filing office and tender of the
filing fee or acceptance of the record by the filing office constitutes filing.

2. Filing does not occur with respect to a record that
a filing office refuses to accept because:

(a) The record is not communicated by a method or medium
of communication authorized by the filing office;

(b) An amount equal to or greater than the applicable
filing fee is not tendered;

(c) The filing office is unable to index the record
because:

(1) In the case of an initial financing statement,
the record does not provide a name for the debtor;

(2) In the case of an amendment or correction
statement, the record:

(I) Does not identify the initial financing
statement as required by section 84 or 90 of this act, as applicable; or

(II) Identifies an initial financing statement
whose effectiveness has lapsed under section 87 of this act;

(3) In the case of an initial financing statement
that provides the name of a debtor identified as a natural person or an
amendment that provides a name of a debtor identified as a natural person which
was not previously provided in the financing statement to which the record
relates, the record does not identify the debtor’s last name; or

(4) In the case of a record filed or recorded in
the filing office described in paragraph (a) of subsection 1 of section 73 of
this act, the record does not provide a sufficient description of the real
property to which it relates;

(d) In the case of an initial financing statement or an
amendment that adds a secured party of record, the record does not provide a
name and mailing address for the secured party of record;

(e) In the case of an initial financing statement or an
amendment that provides a name of a debtor which was not previously provided in
the financing statement to which the amendment relates, the record does not:

(1) Provide a mailing address for the debtor;

(2) Indicate whether the debtor is a natural person
or an organization; or

(3) If the financing statement indicates that the
debtor is an organization, provide:

(I) A type of organization for the debtor;

(II) A jurisdiction of organization for the
debtor; or

(III) An organizational identification number for
the debtor or indicate that the debtor has none;

(f) In the case of an assignment reflected in an initial
financing statement under subsection 1 of section 86 of this act or an
amendment filed under subsection 2 of that section, the record does not provide
a name and mailing address for the assignee; or

(g) In the case of a continuation statement, the record
is not filed within the 6-month period prescribed by subsection 4 of section 87
of this act.

3. For purposes of subsection 2:

(a) A record does not provide information if the filing
office is unable to read or decipher the information; and

(b) A record that does not indicate that it is an
amendment or identify an initial financing statement to which it relates, as
required by section 84, 86 or 90 of this act, is an initial financing
statement.

4. A record that is communicated to the filing office
with tender of the filing fee, but which the filing office refuses to accept
for a reason other than one set forth in subsection 2, is effective as a filed
record except as against a purchaser of the collateral which gives value in
reasonable reliance upon the absence of the record from the files.

Sec. 89. The failure of the filing office to
index a record correctly does not affect the effectiveness of the filed record.

Sec. 90. 1. A person may file in the filing
office a correction statement with respect to a record indexed there under his
name if he believes that the record is inaccurate or was wrongfully filed.

2. A correction statement must:

(a) Identify the record to which it relates by:

(1) The file number assigned to the initial
financing statement to which the record relates; and

(2) If the correction statement relates to a record
filed or recorded in a filing office described in paragraph (a) of subsection 1
of section 73 of this act, the date that the initial financing statement was
filed or recorded and the information specified in subsection 2 of section 74
of this act;

(c) Provide the basis for the person’s belief that the
record is inaccurate and indicate the manner in which he believes the record
should be amended to cure any inaccuracy or provide the basis for his belief
that the record was wrongfully filed.

3. The filing of a correction statement does not affect
the effectiveness of an initial financing statement or other filed record.

Sec. 91. 1. For each record filed in a filing
office, the filing office shall:

(a) Assign a unique number to the filed record;

(b) Create a record that bears the number assigned to
the filed record and the date and time of filing;

(c) Maintain the filed record for public inspection; and

(d) Index the filed record in accordance with
subsections 3, 4 and 5.

2. Except as otherwise provided in subsection 9, a file
number assigned after January 1, 2002, may include a digit that:

(a) Is mathematically derived from or related to the
other digits of the file number; and

(b) Enables the filing office to detect whether a number
communicated as the file number includes a single-digit or transpositional
error.

(a) Index an initial financing statement according to
the name of the debtor and index all filed records relating to the initial
financing statement in a manner that associates with one another an initial
financing statement and all filed records relating to the initial financing
statement; and

(b) Index a record that provides a name of a debtor
which was not previously provided in the financing statement to which the
record relates also according to the name that was not previously provided.

4. If a financing statement is filed as a fixture
filing or covers as-extracted collateral or timber to be cut, it must be filed
for record and the filing office shall index it:

(a) Under the names of the debtor and of each owner of record
shown on the financing statement as if they were the mortgagors under a
mortgage of the real property described; and

(b) To the extent that the law of this state provides
for indexing of mortgages under the name of the mortgagee, under the name of the
secured party as if the secured party were the mortgagee thereunder.

5. If a financing statement is filed as a fixture
filing or covers as-extracted collateral or timber to be cut, the filing office
shall index an assignment filed under subsection 1 of section 86 of this act or
an amendment filed under subsection 2 of that section:

(a) Under the name of the assignor as grantor; and

(b) To the extent that the law of this state provides
for indexing the assignment of a mortgage of real property under the name of
the assignee, under the name of the assignee.

(1) If the filing office is described in paragraph
(a) of subsection 1 of section 73 of this act, by the file number assigned to
the initial financing statement to which the record relates and the date and time
that the record was filed or recorded; or

(2) If the filing office is described in paragraph
(b) of subsection 1 of section 73 of this act, by the file number assigned to
the initial financing statement to which the record relates; and

(b) To associate and retrieve with one another an
initial financing statement and each filed record relating to the initial
financing statement.

7. The filing office may not remove a debtor’s name
from the index until 1 year after the effectiveness of a financing statement
naming the debtor lapses under section 87 of this act with respect to all
secured parties of record.

8. The filing office shall perform the acts required by
subsections 1 to 5, inclusive, within a reasonable time and in the manner
prescribed by filing-office rule.

9. Subsection 2 does not apply to a filing office
described in paragraph (a) of subsection 1 of section 73 of this act.

Sec. 92. 1. A filing office shall refuse to
accept a record for filing for a reason set forth in subsection 2 of section 88
of this act and may refuse to accept a record for filing only for a reason set
forth in that subsection.

2. If a filing office refuses to accept a record for
filing, it shall communicate to the person that presented the record the fact
of and reason for the refusal and the date and time the record would have been
filed had the filing office accepted it. The communication must be made within
a reasonable time and in the manner prescribed by filing-office rule.

3. A filed financing statement satisfying subsections 1
and 2 of section 74 of this act is effective, even if the filing office is
required to refuse to accept it for filing under subsection 1. However, section
59 of this act applies to a filed financing statement providing information described
in paragraph (e) of subsection 2 of section 88 of this act which is incorrect
at the time the financing statement is filed.

4. If a record communicated to a filing office provides
information that relates to more than one debtor, this part applies to each
debtor separately.

Sec. 93. 1. A filing office that accepts written
records may not refuse to accept a written initial financing statement in the
following form except for a reason set forth in subsection 2 of section 88 of
this act:

UCC FINANCING STATEMENT

FOLLOW INSTRUCTIONS (front and back) CAREFULLY

A. NAME AND PHONE OF CONTACT AT FILER [optional]

B. SEND ACKNOWLEDGMENT TO: (Name and Address)

THE
ABOVE SPACE IS FOR

FILING
OFFICE USE ONLY

1. DEBTOR’S EXACT FULL
LEGAL NAME - insert only one debtor name (1a or 1b) - Do not abbreviate or
combine names

2. [ ] TERMINATION: Effectiveness of
the Financing Statement identified above is terminated with respect to security
interest(s) of the Secured Party authorizing this Termination Statement.

3. [ ] CONTINUATION: Effectiveness of
the Financing Statement identified above with respect to security interest(s)
of the Secured Party authorizing this Continuation Statement is continued for
the additional period provided by applicable law.

[ ] RELEASE

4. [ ] ASSIGNMENT (full or partial): Give
name of assignee in item 7a or 7b and address of assignee in item 7c; and also
give name of assignor in item 9.

5. [ ] AMENDMENT (PARTY
INFORMATION): This Amendment affects [ ] Debtor or [ ] Secured Party of record.
Check only one of these two boxes. Also check one of the following three boxes
and provide appropriate information in items 6 and/or 7.

[ ] CHANGE name and/or address: Give
current record name in item 6a or 6b; also give new name (if name change) in
item 7a or 7b and/or new address (if address change) in item 7c.

9. NAME OF SECURED PARTY
OF RECORD AUTHORIZING THIS AMENDMENT (name of assignor, if this is an
assignment). If this is an Amendment authorized by a Debtor which adds
collateral or adds the authorizing Debtor, or if this is a Termination
authorized by a Debtor, check here [ ] and enter name of Debtor authorizing
this Amendment.

Sec. 94. 1. The filing office shall maintain a
record of the information provided in a filed financing statement for at least
1 year after the effectiveness of the financing statement has lapsed under section
87 of this act with respect to all secured parties of record. The record must
be retrievable by using the name of the debtor and:

(a) If the record was filed or recorded in the filing
office described in paragraph (a) of subsection 1 of section 73 of this act, by
using the file number assigned to the initial financing statement to which the
record relates and the date that the record was filed or recorded; or

(b) If the record was filed in the filing office
described in paragraph (b) of subsection 1 of section 73 of this act, by using
the file number assigned to the initial financing statement to which the record
relates.

2. Except to the extent that a statute governing
disposition of public records provides otherwise, the filing office immediately
may destroy any written record evidencing a financing statement. However, if
the filing office destroys a written record, it shall maintain another record
of the financing statement which complies with subsection 1.

Sec. 95. 1. If a person that files a written
record requests an acknowledgment of the filing, the filing office shall send
him an image of the record showing the number assigned to the record pursuant
to paragraph (a) of subsection 1 of section 91 of this act and the date and
time of the filing of the record. However, if he furnishes two copies of the
record to the filing office, the filing office may instead:

(a) Note upon one copy the number assigned to the record
pursuant to that paragraph and the date and time of the filing of the record;
and

(b) Send that copy to him.

2. If a person files a record other than a written
record, the filing office shall communicate to him an acknowledgment that
provides:

(a) The information in the record;

(b) The number assigned to the record pursuant to
paragraph (a) of subsection 1 of section 91 of this act; and

(c) The date and time of the filing of the record.

3. The filing office shall communicate or otherwise
make available in a record the following information to any person that
requests it:

(a) Whether there is on file on a date and time
specified by the filing office, but not a date earlier than 3 business days
before the filing office receives the request, any financing statement that:

(1) Designates a particular debtor;

(2) Has not lapsed under section 87 of this act
with respect to all secured parties of record; and

(3) If the request so states, has lapsed under that
section and a record of which is maintained by the filing office under
subsection 1 of section 94 of this act;

(b) The date and time of filing of each financing
statement; and

(c) The information provided in each financing
statement.

4. In complying with its duty under subsection 3, the
filing office may communicate information in any medium. However, if requested,
the filing office shall communicate information by issuing its written
certificate.

5. The filing office described in paragraph (b) of
subsection 1 of section 73 of this act shall perform the acts required by
subsections 1 to 4, inclusive, within a reasonable time and in the manner
prescribed by filing-office rule.

6. Periodically, the secretary of state shall offer to
sell or license to the public on a nonexclusive basis, in bulk, copies of all
records filed in it under this part, in every medium from time to time
available to the filing office.

Sec. 96. Delay by the filing office beyond a time
limit prescribed by this part is excused if:

1. The delay is caused by interruption of communication
or computer facilities, war, emergency conditions, failure of equipment, or
other circumstances beyond control of the filing office; and

2. The filing office exercises reasonable diligence
under the circumstances.

Sec. 97. 1. Except as otherwise provided in
subsection 5, the fee for filing and indexing a record under this part, other
than an initial financing statement of the kind described in subsection 3 of
section 74 of this act, is:

(a) Twenty dollars if the record is communicated in
writing and consists of one or two pages;

(b) Forty dollars if the record is communicated in
writing and consists of more than two pages, and $1 for each page over 20
pages;

(c) Ten dollars if the record is communicated by another
medium authorized by filing-office rule; and

(d) One dollar for each additional debtor, trade name or
reference to another name under which business is done.

2. The filing officer may charge and collect $1 for each
page of copy or record of filings produced by him at the request of any person.

3. Except as otherwise provided in subsection 5, the
fee for filing and indexing an initial financing statement of the kind
described in subsection 3 of section 74 of this act is:

(a) Forty dollars if the financing statement indicates
that it is filed in connection with a public-finance transaction; and

(b) Twenty dollars if the financing statement indicates
that it is filed in connection with a manufactured-home transaction.

4. The fee for responding to a request for information
from the filing office, including for issuing a certificate showing whether
there is on file any financing statement naming a particular debtor, is:

(a) Twenty dollars if the request is communicated in
writing; and

(b) Fifteen dollars if the request is communicated by
another medium authorized by filing-office rule.

5. This section does not require a fee with respect to
a mortgage that is effective as a financing statement filed as a fixture filing
or as a financing statement covering as-extracted collateral or timber to be
cut under subsection 3 of section 74 of this act. However, the fees for
recording and satisfaction which otherwise would be applicable to the mortgage
apply.

Sec. 98. 1. The secretary of state shall adopt
and publish rules to effectuate this article. The filing-office rules must be:

2. To keep the filing-office rules and the practices of
the filing office in harmony with the rules and practices of filing offices in
other jurisdictions that enact substantially this part, and to keep the
technology used by the filing office compatible with the technology used by
filing offices in other jurisdictions that enact substantially this part, the
secretary of state, so far as is consistent with the purposes, policies, and
provisions of this article, in adopting, amending, and repealing filing-office
rules, shall:

(a) Consult with filing offices in other jurisdictions
that enact substantially this part;

(b) Consult the most recent version of the Model Rules
promulgated by the International Association of Corporate Administrators or any
successor organization; and

(c) Take into consideration the rules and practices of,
and the technology used by, filing offices in other jurisdictions that enact
substantially this part.

Sec. 99. The secretary of state shall report
biennially on or before the first Monday of February in each odd-numbered year
to the governor and legislature on the operation of the filing office. The
report must contain a statement of the extent to which:

1. The filing-office rules are not in harmony with the
rules of filing offices in other jurisdictions that enact substantially this
part and the reasons for these variations; and

2. The filing-office rules are not in harmony with the
most recent version of the Model Rules promulgated by the International
Association of Corporate Administrators, or any successor organization, and the
reasons for these variations.

Sec. 100. 1. After default, a secured party has
the rights provided in this part and, except as otherwise provided in section
101 of this act, those provided by agreement of the parties. A secured party:

(a) May reduce a claim to judgment, foreclose, or
otherwise enforce the claim, security interest, or agricultural lien by any
available judicial procedure; and

(b) If the collateral is documents, may proceed either
as to the documents or as to the goods they cover.

2. A secured party in possession of collateral or
control of collateral under section 5, 6, 7, or 8 of this act has the rights
and duties provided in section 18 of this act.

3. The rights under subsections 1 and 2 are cumulative
and may be exercised simultaneously.

4. Except as otherwise provided in subsection 7 and
section 104 of this act, after default, a debtor and an obligor have the rights
provided in this part and by agreement of the parties.

5. If a secured party has reduced its claim to
judgment, the lien of any levy that may be made upon the collateral by virtue
of an execution based upon the judgment relates back to the earliest of:

(a) The date of perfection of the security interest or
agricultural lien in the collateral;

(b) The date of filing a financing statement covering
the collateral; or

(c) Any date specified in a statute under which the
agricultural lien was created.

6. A sale pursuant to an execution is a foreclosure of
the security interest or agricultural lien by judicial procedure within the
meaning of this section. A secured party may purchase at the sale and
thereafter hold the collateral free of any other requirements of this article.

7. Except as otherwise provided in subsection 3 of
section 106 of this act, this part imposes no duties upon a secured party that
is a consignor or is a buyer of accounts, chattel paper, payment intangibles,
or promissory notes.

Sec. 101. Except as otherwise provided in section
123 of this act, to the extent that they give rights to a debtor or obligor and
impose duties on a secured party, the debtor or obligor may not waive or vary
the rules stated in the following listed sections:

1. Subparagraph (3) of paragraph (d) of subsection 2 of
section 18 of this act, which deals with use and operation of the collateral by
the secured party;

2. Section 21 of this act, which deals with requests
for an accounting and requests concerning a list of collateral and statement of
account;

3. Subsection 3 of section 106 of this act, which deals
with collection and enforcement of collateral;

4. Subsection 1 of section 107 of this act and
subsection 3 of section 114 of this act to the extent that they deal with
application or payment of noncash proceeds of collection, enforcement, or
disposition;

5. Subsection 1 of section 107 of this act and
subsection 4 of section 114 of this act to the extent that they require
accounting for or payment of surplus proceeds of collateral;

6. Section 108 of this act to the extent that it
imposes upon a secured party that takes possession of collateral without
judicial process the duty to do so without breach of the peace;

7. Subsection 2 of section 109, and sections 110, 112,
and 113 of this act, which deal with disposition of collateral;

8. Subsection 6 of section 114 of this act, which deals
with calculation of a deficiency or surplus when a disposition is made to the
secured party, a person related to the secured party, or a secondary obligor;

9. Section 115 of this act, which deals with
explanation of the calculation of a surplus or deficiency;

10. Sections 119, 120, and 121 of this act, which deal
with acceptance of collateral in satisfaction of obligation;

11. Section 122 of this act, which deals with redemption
of collateral;

12. Section 123 of this act, which deals with
permissible waivers; and

13. Sections 124 and 125 of this act, which deal with
the secured party’s liability for failure to comply with this article.

Sec. 102. 1. The parties may determine by
agreement the standards measuring the fulfillment of the rights of a debtor or
obligor and the duties of a secured party under a rule stated in section 101 of
this act if the standards are not manifestly unreasonable.

2. Subsection 1 does not apply to the duty under
section 108 of this act to refrain from breaching the peace.

Sec. 103. 1. If a security agreement covers both
personal and real property, a secured party may proceed:

(a) Under this part as to the personal property without
prejudicing any rights with respect to the real property; or

(b) As to both the personal property and the real
property in accordance with the rights with respect to the real property, in
which case the other provisions of this part do not apply.

2. Subject to subsection 3, if a security agreement
covers goods that are or become fixtures, a secured party may proceed:

(a) Under this part; or

(b) In accordance with the rights with respect to real
property, in which case the other provisions of this part do not apply.

3. Subject to the other provisions of this part, if a
secured party holding a security interest in fixtures has priority over all
owners and encumbrancers of the real property, the secured party, after
default, may remove the collateral from the real property.

4. A secured party that removes collateral shall
promptly reimburse any encumbrancer or owner of the real property, other than
the debtor, for the cost of repair of any physical injury caused by the
removal. The secured party need not reimburse the encumbrancer or owner for any
diminution in value of the real property caused by the absence of the goods
removed or by any necessity of replacing them. A person entitled to
reimbursement may refuse permission to remove until the secured party gives
adequate assurance for the performance of the obligation to reimburse.

Sec. 104. A secured party does not owe a duty
based on its status as secured party:

1. To a person that is a debtor or obligor, unless the
secured party knows:

(a) That he is a debtor or obligor;

(b) His identity; and

(c) How to communicate with him; or

2. To a secured party or lienholder that has filed a
financing statement against a person, unless the secured party knows:

(a) That the person is a debtor; and

(b) His identity.

Sec. 105. For purposes of this part, a default
occurs in connection with an agricultural lien at the time the secured party
becomes entitled to enforce the lien in accordance with the statute under which
it was created.

Sec. 106. 1. If so agreed, and in any event after
default, a secured party:

(a) May notify an account debtor or other person
obligated on collateral to make payment or otherwise render performance to or
for the benefit of the secured party;

(b) May take any proceeds to which the secured party is
entitled under section 36 of this act;

(c) May enforce the obligations of an account debtor or
other person obligated on collateral and exercise the rights of the debtor with
respect to the obligation of the account debtor or other person obligated on
collateral to make payment or otherwise
render performance to the debtor, and with respect to any property that secures
the obligations of the account debtor or other person obligated on the
collateral;

to make payment or otherwise render performance to the
debtor, and with respect to any property that secures the obligations of the
account debtor or other person obligated on the collateral;

(d) If it holds a security interest in a deposit account
perfected by control under paragraph (a) of subsection 1 of section 5 of this
act, may apply the balance of the deposit account to the obligation secured by
the deposit account; and

(e) If it holds a security interest in a deposit account
perfected by control under paragraph (b) or (c) of subsection 1 of section 5 of
this act, may instruct the bank to pay the balance of the deposit account to or
for the benefit of the secured party.

2. If necessary to enable a secured party to exercise
under paragraph (c) of subsection 1 the right of a debtor to enforce a mortgage
nonjudicially, the secured party may record in the office in which the mortgage
is recorded:

(a) A copy of the security agreement that creates or
provides for a security interest in the obligation secured by the mortgage; and

(2) The secured party is entitled to enforce the
mortgage nonjudicially.

3. A secured party shall proceed in a commercially
reasonable manner if the secured party:

(a) Undertakes to collect from or enforce an obligation
of an account debtor or other person obligated on collateral; and

(b) Is entitled to charge back uncollected collateral or
otherwise to full or limited recourse against the debtor or a secondary
obligor.

4. A secured party may deduct from the collections made
pursuant to subsection 3 reasonable expenses of collection and enforcement,
including reasonable attorney’s fees and legal expenses incurred by the secured
party.

5. This section does not determine whether an account
debtor, bank, or other person obligated on collateral owes a duty to a secured
party.

Sec. 107. 1. If a security interest or
agricultural lien secures payment or performance of an obligation, the following
rules apply:

(a) A secured party shall apply or pay over for
application the cash proceeds of collection or enforcement under this section
in the following order to:

(1) The reasonable expenses of collection and
enforcement and, to the extent provided for by agreement and not prohibited by
law, reasonable attorney’s fees and legal expenses incurred by the secured
party;

(2) The satisfaction of obligations secured by the
security interest or agricultural lien under which the collection or enforcement
is made; and

(3) The satisfaction of obligations secured by any
subordinate security interest in or other lien on the collateral subject to the
security interest or agricultural lien under which the collection or
enforcement is made if the secured party receives an authenticated demand for
proceeds before distribution of the proceeds is completed.

(b) If requested by a secured party, a holder of a
subordinate security interest or other lien shall furnish reasonable proof of
the interest or lien within a reasonable time. Unless the holder complies, the
secured party need not comply with the holder’s demand under subparagraph (3)
of paragraph (a).

(c) A secured party need not apply or pay over for
application noncash proceeds of collection and enforcement under this section
unless the failure to do so would be commercially unreasonable. A secured party
that applies or pays over for application noncash proceeds shall do so in a
commercially reasonable manner.

(d) A secured party shall account to and pay a debtor
for any surplus, and the obligor is liable for any deficiency.

2. If the underlying transaction is a sale of accounts,
chattel paper, payment intangibles, or promissory notes, the debtor is not
entitled to any surplus, and the obligor is not liable for any deficiency.

Sec. 108. 1. After default, a secured party:

(a) May take possession of the collateral;

(b) If a debtor so agrees, may require the debtor to
assemble the collateral and make it available to the secured party at a place
to be designated by the secured party which is reasonably convenient to both
parties; and

(c) Without removal may render equipment unusable and
dispose of collateral on a debtor’s premises under section 109 of this act.

2. A secured party may proceed under subsection 1:

(a) Pursuant to judicial process; or

(b) Without judicial process, if it proceeds without
breach of the peace.

Sec. 109. 1. After default, a secured party may
sell, lease, license, or otherwise dispose of any or all of the collateral in
its present condition or following any commercially reasonable preparation or
processing.

2. Every aspect of a disposition of collateral,
including the method, manner, time, place, and other terms, must be
commercially reasonable. If commercially reasonable, a secured party may
dispose of collateral by public or private proceedings, by one or more
contracts, as a unit or in parcels, and at any time and place and on any terms.

3. A secured party may purchase collateral:

(a) At a public sale; or

(b) At a private sale only if the collateral is of a
kind that is customarily sold on a recognized market or the subject of widely
distributed standard price quotations.

4. A contract for sale, lease, license, or other
disposition includes the warranties relating to title, possession, quiet
enjoyment, and the like which by operation of law accompany a voluntary
disposition of property of the kind subject to the contract.

5. A secured party may disclaim or modify warranties
under subsection 4:

(a) In a manner that would be effective to disclaim or
modify the warranties in a voluntary disposition of property of the kind
subject to the contract of disposition; or

(b) By communicating to the purchaser a record
evidencing the contract for disposition and including an express disclaimer or
modification of the warranties.

6. A record is sufficient to disclaim warranties under
subsection 5 if it indicates “There is no warranty relating to title,
possession, quiet enjoyment, or the like in this disposition” or uses words of
similar import.

Sec. 110. 1. In this section, “notification date”
means the earlier of the date on which:

(a) A secured party sends to the debtor and any
secondary obligor an authenticated notification of disposition; or

(b) The debtor and any secondary obligor waive the right
to notification.

2. Except as otherwise provided in subsection 4, a
secured party that disposes of collateral under section 109 of this act shall
send to the persons specified in subsection 3 a reasonable authenticated
notification of disposition.

3. To comply with subsection 2, the secured party shall
send an authenticated notification of disposition to:

(a) The debtor;

(b) Any secondary obligor; and

(c) If the collateral is other than consumer goods:

(1) Any other person from which the secured party
has received, before the notification date, an authenticated notification of a
claim of an interest in the collateral;

(2) Any other secured party or lienholder that, 10
days before the notification date, held a security interest in or other lien on
the collateral perfected by the filing of a financing statement that:

(I) Identified the collateral;

(II) Was indexed under the debtor’s name as of
that date; and

(III) Was filed in the office in which to file
a financing statement against the debtor covering the collateral as of that
date; and

(3) Any other secured party that, 10 days before
the notification date, held a security interest in the collateral perfected by
compliance with a statute, regulation, or treaty described in subsection 1 of
section 32 of this act.

4. Subsection 2 does not apply if the collateral is
perishable or threatens to decline speedily in value or is of a type
customarily sold on a recognized market.

5. A secured party complies with the requirement for
notification prescribed by subparagraph (2) of paragraph (c) of subsection 3
if:

(a) Not later than 20 days or earlier than 30 days
before the notification date, the secured party requests, in a commercially
reasonable manner, information concerning financing statements indexed under
the debtor’s name in the office indicated in that subparagraph; and

(b) Before the notification date, the secured party:

(1) Did not receive a response to the request for
information; or

(2) Received a response to the request for
information and sent an authenticated notification of disposition to each
secured party named in that response whose financing statement covered the
collateral.

Sec. 111. 1. Except as otherwise provided in
subsection 2, whether a notification is sent within a reasonable time is a
question of fact.

2. In a transaction other than a consumer transaction,
a notification of disposition sent after default and 10 days or more before the
earliest time of disposition set forth in the notification is sent within a
reasonable time before the disposition.

Sec. 112. Except in a consumer-goods transaction,
the following rules apply:

1. The contents of a notification of disposition are
sufficient if the notification:

(a) Describes the debtor and the secured party;

(b) Describes the collateral that is the subject of the
intended disposition;

(c) States the method of intended disposition;

(d) States that the debtor is entitled to an accounting
of the unpaid indebtedness and states the charge, if any, for an accounting;
and

(e) States the time and place of a public sale or the
time after which any other disposition is to be made.

2. Whether the contents of a notification that lacks
any of the information specified in subsection 1 are nevertheless sufficient is
a question of fact.

3. The contents of a notification providing substantially
the information specified in subsection 1 are sufficient, even if the
notification includes:

(a) Information not specified by that subsection; or

(b) Minor errors that are not seriously misleading.

4. A particular phrasing of the notification is not
required.

5. The following form of notification and the form
appearing in subsection 3 of section 113 of this act, when completed, each
provides sufficient information:

NOTIFICATION OF DISPOSITION OF COLLATERAL

To: [Name
of debtor, obligor, or other person to which the notification is sent]

From: [Name,
address, and telephone number of secured party]

Name of Debtor(s): [Include
only if debtor(s) are not an addressee]

[For a public disposition:]

We will sell [or lease or license, as applicable] the
[describe collateral] [to the highest qualified bidder] in public as follows:

Day and Date:

Time:

Place:

[For a private disposition:]

We will sell [or lease or license, as applicable] the
[describe collateral] privately sometime after [day and date].

You are entitled to an accounting of the unpaid indebtedness
secured by the property that we intend to sell [or lease or license, as
applicable] [for a charge of $___]. You may request an accounting by calling us
at [telephone number].

Sec. 113. In a consumer-goods transaction, the
following rules apply:

1. A notification of disposition must provide the
following information:

(a) The information specified in subsection 1 of section
112 of this act;

(b) A description of any liability for a deficiency of
the person to which the notification is sent;

(c) A telephone number from which the amount that must
be paid to the secured party to redeem the collateral under section 122 of this
act is available; and

(d) A telephone number or mailing address from which
additional information concerning the disposition and the obligation secured is
available.

2. A particular phrasing of the notification is not
required.

3. The following form of notification, when completed,
provides sufficient information:

[Name and address of secured party]

[Date]

NOTICE OF OUR PLAN TO SELL PROPERTY

[Name and address of any obligor who is also a debtor]

Subject: [Identification of Transaction]

We have your [describe collateral], because you broke
promises in our agreement.

[For a public disposition:]

We will sell [describe collateral] at public sale. A
sale could include a lease or license. The sale will be held as follows:

Date:

Time:

Place:

You may attend the sale and bring bidders if you want.

[For a private disposition:]

We will sell [describe collateral] at private sale
sometime after [date]. A sale could include a lease or license.

The money that we get from the sale (after paying our costs)
will reduce the amount you owe. If we get less money than you owe, you [will
or will not, as applicable] still owe us the difference. If we get more money
than you owe, you will get the extra money, unless we must pay it to someone
else.

You can get the property back at any time before we sell it
by paying us the full amount you owe (not just the past due payments),
including our expenses. To learn the exact amount you must pay, call us at
[telephone number].

If you want us to explain to you in writing how we have
figured the amount that you owe us, you may call us at [telephone number]
or write us at [secured party’s address] and request a written explanation.
[We will charge you $___ for the explanation if we sent you another written
explanation of the amount you owe us within the last 6 months.]

If you need more information about the sale call us at
[telephone number] or write us at [secured party’s address].

We are sending this notice to the following other people who
have an interest in [describe collateral] or who owe money under your
agreement:

[Names of all other debtors and obligors, if any]

4. A notification in the form of subsection 3 is
sufficient, even if additional information appears at the end of the form.

5. A notification in the form of subsection 3 is
sufficient, even if it includes errors in information not required by
subsection 1, unless the error is misleading with respect to rights arising
under this article.

6. If a notification under this section is not in the
form of subsection 3, law other than this article determines the effect of
including information not required by subsection 1.

Sec. 114. 1. A secured party shall apply or pay
over for application the cash proceeds of disposition in the following order
to:

(a) The reasonable expenses of retaking, holding,
preparing for disposition, processing, and disposing, and, to the extent
provided for by agreement and not prohibited by law, reasonable attorney’s fees
and legal expenses incurred by the secured party;

(b) The satisfaction of obligations secured by the
security interest or agricultural lien under which the disposition is made;

(c) The satisfaction of obligations secured by any
subordinate security interest in or other subordinate lien on the collateral
if:

(1) The secured party receives from the holder of
the subordinate security interest or other lien an authenticated demand for
proceeds before distribution of the proceeds is completed; and

(2) In a case in which a consignor has an interest
in the collateral, the subordinate security interest or other lien is senior to
the interest of the consignor; and

(d) A secured party that is a consignor of the
collateral if the secured party receives from the consignor an authenticated
demand for proceeds before distribution of the proceeds is completed.

2. If requested by a secured party, a holder of a
subordinate security interest or other lien shall furnish reasonable proof of
the interest or lien within a reasonable time. Unless the holder does so, the
secured party need not comply with the holder’s demand under paragraph (c) of
subsection 1.

3. A secured party need not apply or pay over for
application noncash proceeds of disposition under this section unless the
failure to do so would be commercially unreasonable. A secured party that
applies or pays over for application noncash proceeds shall do so in a
commercially reasonable manner.

4. If the security interest under which a disposition
is made secures payment or performance of an obligation, after making the
payments and applications required by subsection 1 and permitted by subsection
3:

(a) Unless paragraph (d) of subsection 1 requires the
secured party to apply or pay over cash proceeds to a consignor, the secured
party shall account to and pay a debtor for any surplus; and

(b) The obligor is liable for any deficiency.

5. If the underlying transaction is a sale of accounts,
chattel paper, payment intangibles, or promissory notes:

(a) The debtor is not entitled to any surplus; and

(b) The obligor is not liable for any deficiency.

6. The surplus or deficiency following a disposition is
calculated based on the amount of proceeds that would have been realized in a
disposition complying with this part to a transferee other than the secured
party, a person related to the secured party, or a secondary obligor if:

(a) The transferee in the disposition is the secured
party, a person related to the secured party, or a secondary obligor; and

(b) The amount of proceeds of the disposition is
significantly below the range of proceeds that a complying disposition to a
person other than the secured party, a person related to the secured party, or
a secondary obligor would have brought.

7. A secured party that receives cash proceeds of a
disposition in good faith and without knowledge that the receipt violates the
rights of the holder of a security interest or other lien that is not
subordinate to the security interest or agricultural lien under which the
disposition is made:

(a) Takes the cash proceeds free of the security
interest or other lien;

(b) Is not obligated to apply the proceeds of the
disposition to the satisfaction of obligations secured by the security interest
or other lien; and

(c) Is not obligated to account to or pay the holder of
the security interest or other lien for any surplus.

Sec. 115. 1. In this section:

(a) “Explanation” means a writing that:

(1) States the amount of the surplus or deficiency;

(2) Provides an explanation in accordance with
subsection 3 of how the secured party calculated the surplus or deficiency;

(3) States, if applicable, that future debits,
credits, charges, including additional credit service charges or interest
rebates, and expenses may affect the amount of the surplus or deficiency; and

(4) Provides a telephone number or mailing address
from which additional information concerning the transaction is available.

(b) “Request” means a record:

(1) Authenticated by a debtor or consumer obligor;

(2) Requesting that the recipient provide an
explanation; and

(3) Sent after disposition of the collateral under
section 109 of this act.

2. In a consumer-goods transaction in which the debtor
is entitled to a surplus or a consumer obligor is liable for a deficiency under
section 114 of this act, the secured party shall:

(a) Send an explanation to the debtor or consumer
obligor, as applicable, after the disposition and:

(1) Before or when the secured party accounts to
the debtor and pays any surplus or first makes written demand on the consumer
obligor after the disposition for payment of the deficiency; and

(2) Within 14 days after receipt of a request; or

(b) In the case of a consumer obligor who is liable for
a deficiency, within 14 days after receipt of a request, send to the consumer
obligor a record waiving the secured party’s right to a deficiency.

3. To comply with subparagraph (2) of paragraph (a) of
subsection 1, a writing must provide the following information in the following
order:

(a) The aggregate amount of obligations secured by the
security interest under which the disposition was made, and, if the amount
reflects a rebate of unearned interest or credit service charge, an indication
of that fact, calculated as of a specified date:

(1) If the secured party takes or receives
possession of the collateral after default, not more than 35 days before the
secured party takes or receives possession; or

(2) If the secured party takes or receives
possession of the collateral before default or does not take possession of the
collateral, not more than 35 days before the disposition;

(b) The amount of proceeds of the disposition;

(c) The aggregate amount of the obligations after
deducting the amount of proceeds;

(d) The amount, in the aggregate or by type, and types
of expenses, including expenses of retaking, holding, preparing for
disposition, processing, and disposing of the collateral, and attorney’s fees
secured by the collateral which are known to the secured party and relate to
the current disposition;

(e) The amount, in the aggregate or by type, and types
of credits, including rebates of interest or credit service charges, to which
the obligor is known to be entitled and which are not reflected in the amount
in paragraph (a); and

(f) The amount of the surplus or deficiency.

4. A particular phrasing of the explanation is not
required. An explanation complying substantially with the requirements of
paragraph (a) of subsection 1 is sufficient, even if it includes minor errors
that are not seriously misleading.

5. A debtor or consumer obligor is entitled without
charge to one response to a request under this section during any 6-month
period in which the secured party did not send to the debtor or consumer
obligor an explanation pursuant to paragraph (a) of subsection 2. The secured
party may require payment of a charge not exceeding $25 for each additional
response.

(c) Discharges any subordinate security interest or
other subordinate lien.

2. A transferee that acts in good faith takes free of
the rights and interests described in subsection 1, even if the secured party
fails to comply with this article or the requirements of any judicial
proceeding.

3. If a transferee does not take free of the rights and
interests described in subsection 1, he takes the collateral subject to:

(a) The debtor’s rights in the collateral;

(b) The security interest or agricultural lien under
which the disposition is made; and

(c) Any other security interest or other lien.

Sec. 117. 1. A secondary obligor acquires the
rights and becomes obligated to perform the duties of the secured party after
the secondary obligor:

(a) Receives an assignment of a secured obligation from
the secured party;

(b) Receives a transfer of collateral from the secured
party and agrees to accept the rights and assume the duties of the secured
party; or

(c) Is subrogated to the rights of a secured party with
respect to collateral.

2. An assignment, transfer, or subrogation described in
subsection 1:

(a) Is not a disposition of collateral under section 109
of this act; and

(b) Relieves the secured party of further duties under
this article.

Sec. 118. 1. In this section, “transfer
statement” means a record authenticated by a secured party stating:

(a) That the debtor has defaulted in connection with an
obligation secured by specified collateral;

(b) That the secured party has exercised its
post-default remedies with respect to the collateral;

(c) That, by reason of the exercise, a transferee has
acquired the rights of the debtor in the collateral; and

(d) The name and mailing address of the secured party,
debtor, and transferee.

2. A transfer statement entitles the transferee to the
transfer of record of all rights of the debtor in the collateral specified in
the statement in any official filing, recording, registration, or
certificate-of-title system covering the collateral. If a transfer statement is
presented with the applicable fee and request form to the official or office
responsible for maintaining the system, the official or office shall:

(a) Accept the transfer statement;

(b) Promptly amend its records to reflect the transfer;
and

(c) If applicable, issue a new appropriate certificate of
title in the name of the transferee.

3. A transfer of the record or legal title to
collateral to a secured party under subsection 2 or otherwise is not of itself
a disposition of collateral under this article and does not of itself relieve
the secured party of its duties under this article.

Sec. 119. 1. Except as otherwise provided in
subsection 7, a secured party may accept collateral in full or partial
satisfaction of the obligation it secures only if:

(a) The debtor consents to the acceptance under
subsection 3;

(b) The secured party does not receive, within the time
set forth in subsection 5, a notification of objection to the proposal
authenticated by:

(1) A person to which the secured party was
required to send a proposal under section 120 of this act; or

(2) Any other person, other than the debtor,
holding an interest in the collateral subordinate to the security interest that
is the subject of the proposal;

(c) If the collateral is consumer goods, the collateral
is not in the possession of the debtor when the debtor consents to the
acceptance; and

(d) Subsection 5 does not require the secured party to dispose
of the collateral.

2. A purported or apparent acceptance of collateral
under this section is ineffective unless:

(a) The secured party consents to the acceptance in an
authenticated record or sends a proposal to the debtor; and

(b) The conditions of subsection 1 are met.

3. For purposes of this section:

(a) A debtor consents to an acceptance of collateral in
partial satisfaction of the obligation it secures only if he agrees to the
terms of the acceptance in a record authenticated after default; and

(b) A debtor consents to an acceptance of collateral in
full satisfaction of the obligation it secures only if he agrees to the terms
of the acceptance in a record authenticated after default or the secured party:

(1) Sends to the debtor after default a proposal
that is unconditional or subject only to a condition that collateral not in the
possession of the secured party be preserved or maintained;

(2) In the proposal, proposes to accept collateral
in full satisfaction of the obligation it secures; and

(3) Does not receive a notification of objection
authenticated by the debtor within 20 days after the proposal is sent.

4. To be effective under paragraph (b) of subsection 1,
a notification of objection must be received by the secured party:

(a) In the case of a person to which the proposal was
sent pursuant to section 120 of this act, within 20 days after notification was
sent to him; and

(b) In other cases:

(1) Within 20 days after the last notification was
sent pursuant to section 120 of this act; or

(2) If a notification was not sent, before the
debtor consents to the acceptance under subsection 3.

5. A secured party that has taken possession of
collateral shall dispose of the collateral pursuant to section 109 of this act
within the time specified in subsection 6 if:

(a) Sixty percent of the cash price has been paid in the
case of a purchase-money security interest in consumer goods; or

(b) Sixty percent of the principal amount of the
obligation secured has been paid in the case of a non-purchase-money security
interest in consumer goods.

6. To comply with subsection 5, the secured party shall
dispose of the collateral:

(a) Within 90 days after taking possession; or

(b) Within any longer period to which the debtor and all
secondary obligors have agreed in an agreement to that effect entered into and
authenticated after default.

7. In a consumer transaction, a secured party may not
accept collateral in partial satisfaction of the obligation it secures.

Sec. 120. 1. A secured party that desires to
accept collateral in full or partial satisfaction of the obligation it secures
shall send its proposal to:

(a) Any person from which the secured party has
received, before the debtor consented to the acceptance, an authenticated
notification of a claim of an interest in the collateral;

(b) Any other secured party or lienholder that, 10 days
before the debtor consented to the acceptance, held a security interest in or
other lien on the collateral perfected by the filing of a financing statement
that:

(1) Identified the collateral;

(2) Was indexed under the debtor’s name as of that
date; and

(3) Was filed in the office or offices in which to
file a financing statement against the debtor covering the collateral as of
that date; and

(c) Any other secured party that, 10 days before the
debtor consented to the acceptance, held a security interest in the collateral
perfected by compliance with a statute, regulation, or treaty described in
subsection 1 of section 32 of this act.

2. A secured party that desires to accept collateral in
partial satisfaction of the obligation it secures shall send its proposal to
any secondary obligor in addition to the persons described in subsection 1.

Sec. 121. 1. A secured party’s acceptance of
collateral in full or partial satisfaction of the obligation it secures:

(a) Discharges the obligation to the extent consented to
by the debtor;

(b) Transfers to the secured party all of a debtor’s
rights in the collateral;

(c) Discharges the security interest or agricultural
lien that is the subject of the debtor’s consent and any subordinate security
interest or other subordinate lien; and

(d) Terminates any other subordinate interest.

2. A subordinate interest is discharged or terminated
under subsection 1 even if the secured party fails to comply with this article.

Sec. 122. 1. A debtor, any secondary obligor, or
any other secured party or lienholder may redeem collateral.

2. To redeem collateral, a person must tender:

(a) Fulfillment of all obligations secured by the
collateral; and

(b) The reasonable expenses and attorney’s fees
described in paragraph (a) of subsection 1 of section 114 of this act.

(b) Has disposed of collateral or entered into a
contract for its disposition under section 109 of this act; or

(c) Has accepted collateral in full or partial
satisfaction of the obligation it secures under section 121 of this act.

Sec. 123. 1. A debtor or secondary obligor may
waive the right to notification of disposition of collateral under section 110
of this act only by an agreement to that effect entered into and authenticated
after default.

2. Except in a consumer-goods transaction, a debtor or
secondary obligor may waive the right to redeem collateral under section 122 of
this act only by an agreement to that effect entered into and authenticated
after default.

Sec. 124. 1. If it is established that a secured
party is not proceeding in accordance with this article, a court may order or
restrain collection, enforcement, or disposition of collateral on appropriate
terms and conditions.

2. Subject to subsections 3, 4, and 6, a person is
liable for damages in the amount of any loss caused by a failure to comply with
this article. Loss caused by a failure to comply with a request under section
21 of this act may include loss resulting from the debtor’s inability to
obtain, or increased costs of, alternative financing.

3. Except as otherwise provided in section 127 of this
act:

(a) A person that, at the time of the failure, was a
debtor, was an obligor, or held a security interest in or other lien on the
collateral may recover damages under subsection 2 for its loss; and

(b) If the collateral is consumer goods, a person that
was a debtor or a secondary obligor at the time a secured party failed to
comply with this part may recover for that failure in any event an amount not
less than the credit service charge plus 10 percent of the principal amount of
the obligation or the time-price differential plus 10 percent of the cash
price.

4. A debtor whose deficiency is eliminated under
section 125 of this act may recover damages for the loss of any surplus.
However, a debtor or secondary obligor whose deficiency is eliminated or
reduced under that section may not otherwise recover under subsection 2 for
noncompliance with the provisions of this part relating to collection,
enforcement, disposition, or acceptance.

5. In addition to any damages recoverable under
subsection 2, the debtor, consumer obligor, or person named as a debtor in a
filed record, as applicable, may recover $500 in each case from a person that:

(a) Fails to comply with section 19 of this act;

(b) Fails to comply with section 20 of this act;

(c) Files a record that he is not entitled to file under
subsection 1 of section 81 of this act;

(d) Fails to cause the secured party of record to file
or send a termination statement as required by subsection 1 or 3 of section 85
of this act;

(e) Fails to comply with paragraph (a) of subsection 2
of section 115 of this act and whose failure is part of a pattern, or
consistent with a practice, of noncompliance; or

(f) Fails to comply with paragraph (b) of subsection 2
of section 115 of this act.

6. A debtor or consumer obligor may recover damages
under subsection 2 and, in addition, $500 in each case from a person that,
without reasonable cause, fails to comply with a request under section 21 of
this act. A recipient of a request under that section which never claimed an
interest in the collateral or obligations that are the subject of a request
under that section has a reasonable excuse for failure to comply with the
request within the meaning of this subsection.

7. If a secured party fails to comply with a request
regarding a list of collateral or a statement of account under section 21 of
this act, the secured party may claim a security interest only as shown in the
statement included in the request as against a person that is reasonably misled
by the failure.

Sec. 125. 1. In an action arising from a transaction,
other than a consumer transaction, in which the amount of a deficiency or
surplus is in issue, the following rules apply:

(a) A secured party need not prove compliance with the
provisions of this part relating to collection, enforcement, disposition, or
acceptance unless the debtor or a secondary obligor places the secured party’s
compliance in issue.

(b) If the secured party’s compliance is placed in
issue, the secured party has the burden of establishing that the collection,
enforcement, disposition, or acceptance was conducted in accordance with this
part.

(c) Except as otherwise provided in section 127 of this
act, if a secured party fails to prove that the collection, enforcement,
disposition, or acceptance was conducted in accordance with the provisions of
this part relating to collection, enforcement, disposition, or acceptance, the
liability of a debtor or a secondary obligor for a deficiency is limited to an
amount by which the sum of the secured obligation, expenses, and attorney’s fees
exceeds the greater of:

(1) The proceeds of the collection, enforcement,
disposition, or acceptance; or

(2) The amount of proceeds that would have been
realized had the noncomplying secured party proceeded in accordance with the
provisions of this part relating to collection, enforcement, disposition, or
acceptance.

(d) For purposes of subparagraph (2) of paragraph (c),
the amount of proceeds that would have been realized is equal to the sum of the
secured obligation, expenses, and attorney’s fees unless the secured party
proves that the amount is less than that sum.

(e) If a deficiency or surplus is calculated under
subsection 6 of section 114 of this act, the debtor or obligor has the burden
of establishing that the amount of proceeds of the disposition is significantly
below the range of prices that a complying disposition to a person other than
the secured party, a person related to the secured party, or a secondary
obligor would have brought.

2. The limitation of the rules in subsection 1 to
transactions other than consumer transactions leaves to the court the
determination of the proper rules in consumer transactions. The court may not
infer from that limitation the nature of
the proper rule in consumer transactions and may continue to apply established
approaches.

limitation the nature of the proper rule in consumer
transactions and may continue to apply established approaches.

Sec. 126. 1. The fact that a greater amount could
have been obtained by a collection, enforcement, disposition, or acceptance at
a different time or in a different method from that selected by the secured
party is not of itself sufficient to preclude the secured party from
establishing that the collection, enforcement, disposition, or acceptance was
made in a commercially reasonable manner.

2. A disposition of collateral is made in a
commercially reasonable manner if the disposition is made:

(a) In the usual manner on any recognized market;

(b) At the price current in any recognized market at the
time of the disposition; or

(c) Otherwise in conformity with reasonable commercial
practices among dealers in the type of property that was the subject of the
disposition.

3. A collection, enforcement, disposition, or
acceptance is commercially reasonable if it has been approved:

(a) In a judicial proceeding;

(b) By a genuine creditors’ committee;

(c) By a representative of creditors; or

(d) By an assignee for the benefit of creditors.

4. Approval under subsection 3 need not be obtained,
and lack of approval does not mean that the collection, enforcement,
disposition, or acceptance is not commercially reasonable.

Sec. 127. 1. Unless a secured party knows that a
person is a debtor or obligor, knows his identity, and knows how to communicate
with him:

(a) The secured party is not liable to the person, or to
a secured party or lienholder that has filed a financing statement against him,
for failure to comply with this article; and

(b) The secured party’s failure to comply with this
article does not affect the liability of the person for a deficiency.

2. A secured party is not liable because of its status
as a secured party:

(a) To a person that is a debtor or obligor, unless the
secured party knows:

(1) That he is a debtor or obligor;

(2) His identity; and

(3) How to communicate with him; or

(b) To a secured party or lienholder that has filed a
financing statement against a person, unless the secured party knows:

(1) That he is a debtor; and

(2) His identity.

3. A secured party is not liable to any person, and a
person’s liability for a deficiency is not affected, because of any act or
omission arising out of the secured party’s reasonable belief that a
transaction is not a consumer-goods transaction or a consumer transaction or
that goods are not consumer goods, if the secured party’s belief is based on
its reasonable reliance on:

(a) A debtor’s representation concerning the purpose for
which collateral was to be used, acquired, or held; or

(b) An obligor’s representation concerning the purpose
for which a secured obligation was incurred.

4. A secured party is not liable to any person under
paragraph (b) of subsection 3 of section 124 of this act for its failure to
comply with section 115 of this act.

5. A secured party is not liable under paragraph (b) of
subsection 3 of section 124 of this act more than once with respect to any one
secured obligation.

Sec. 128. 1. Except as otherwise provided in
sections 128 to 134, inclusive, of this act, this article as amended applies to
a transaction or lien within its scope, even if the transaction or lien was
entered into or created before the amendments to this article take effect.

2. Except as otherwise provided in subsection 3 and
sections 129 to 134, inclusive, of this act:

(a) Transactions and liens that were not governed by
this article before July 1, 2001, were validly entered into or created before
that date, and would be subject to this article if they had been entered into
or created after that date, and the rights, duties, and interests flowing from
those transactions and liens remain valid on and after that date; and

(b) The transactions and liens may be terminated,
completed, consummated, or enforced as required or permitted by this article or
by the law that otherwise would apply if this article had not taken effect.

3. This article as amended does not affect an action,
case, or proceeding commenced before July 1, 2001.

Sec. 129. 1. A security interest that is
enforceable immediately before July 1, 2001, and would have priority over the
rights of a person that becomes a lien creditor at that time is a perfected
security interest under this article if, when this article as amended takes
effect, the applicable requirements for enforceability and perfection under
this article as amended are satisfied without further action.

2. Except as otherwise provided in section 131 of this
act, if, immediately before July 1, 2001, a security interest is enforceable
and would have priority over the rights of a person that becomes a lien
creditor at that time, but the applicable requirements for enforceability or
perfection under this article as amended are not satisfied on July 1, 2001, the
security interest:

(a) Is a perfected security interest for 1 year after
July 1, 2001;

(b) Remains enforceable thereafter only if the security
interest becomes enforceable under section 14 of this act before the year
expires; and

(c) Remains perfected thereafter only if the applicable
requirements for perfection under this article as amended are satisfied before
the year expires.

Sec. 130. A security interest that is enforceable
immediately before July 1, 2001, but which would be subordinate to the rights
of a person that becomes a lien creditor at that time:

1. Remains an enforceable security interest for 1 year
after July 1, 2001;

2. Remains enforceable thereafter if the security
interest becomes enforceable under section 14 of this act when this article as
amended takes effect or within 1 year thereafter; and

3. Becomes perfected:

(a) Without further action, on July 1, 2001, if the
applicable requirements for perfection under this article as amended are
satisfied before or at that time; or

(b) When the applicable requirements for perfection are
satisfied if the requirements are satisfied after that time.

Sec. 131. 1. If action, other than the filing of
a financing statement, is taken before July 1, 2001, and the action would have
resulted in priority of a security interest over the rights of a person that
becomes a lien creditor had the security interest become enforceable before
that date, the action is effective to perfect a security interest that attaches
under this article as amended within 1 year after that date. An attached
security interest becomes unperfected 1 year after July 1, 2001, unless the
security interest becomes a perfected security interest under this article as
amended before the expiration of that period.

2. The filing of a financing statement before July 1,
2001, is effective to perfect a security interest to the extent the filing
would satisfy the applicable requirements for perfection under this article as
amended.

3. This article as amended does not render ineffective
an effective financing statement that was filed before July 1, 2001, and
satisfied the applicable requirements for perfection under the law of the
jurisdiction governing perfection as provided in section 4 of this act as that
section read at the time of filing. However, except as otherwise provided in
subsections 4 and 5 and section 134 of this act, the financing statement ceases
to be effective at the earlier of:

(a) The time the financing statement would have ceased
to be effective under the law of the jurisdiction in which it is filed; or

(b) June 30, 2006.

4. The filing of a continuation statement on or after
July 1, 2001, does not continue the effectiveness of the financing statement
filed before that date. However, upon the timely filing of a continuation
statement after that date and in accordance with the law of the jurisdiction governing
perfection as provided in Part 3, the effectiveness of a financing statement
filed in the same office in that jurisdiction before that date continues for
the period provided by the law of that jurisdiction.

5. Paragraph (b) of subsection 3 applies to a financing
statement that was filed against a transmitting utility before July 1, 2001,
and satisfied the applicable requirements for perfection under the law of the
jurisdiction governing perfection as provided in section 4 of this act as that
section read at the time of filing only to the extent that Part 3 provides that
the law of a jurisdiction other than jurisdiction in which the financing
statement is filed governs perfection of a security interest in collateral
covered by the financing statement.

6. A financing statement that includes a financing
statement filed before July 1, 2001, and a continuation statement filed after
that date are effective only to the extent that the financing statement
satisfies the requirements of Part 5 for an initial financing statement.

Sec. 132. 1. The filing of an initial financing
statement in the office specified in section 73 of this act continues the
effectiveness of a financing statement filed before July 1, 2001, if:

(a) The filing of an initial financing statement in that
office would be effective to perfect a security interest under this article as
amended;

(b) The pre-effective-date financing statement was filed
in an office in another state or another office in this state; and

(c) The initial financing statement satisfies subsection
3.

2. The filing of an initial financing statement under
subsection (1) continues the effectiveness of the pre-effective-date financing
statement:

(a) If the initial financing statement is filed before
July 1, 2001, for the period provided in NRS 104.9403 before that date with
respect to a financing statement; and

(b) If the initial financing statement is filed on or
after July 1, 2001, for the period provided in section 87 of this act with
respect to an initial financing statement.

3. To be effective for purposes of subsection 1, an
initial financing statement must:

(a) Satisfy the requirements of Part 5 for an initial
financing statement;

(b) Identify the pre-effective-date financing statement
by indicating the office in which the financing statement was filed and
providing the dates of filing and file numbers, if any, of the financing
statement and of the most recent continuation statement filed with respect to
the financing statement; and

Sec. 133. A person may file an initial financing
statement or a continuation statement under sections 128 to 134, inclusive, of
this act if:

1. The secured party of record authorizes the filing;
and

2. The filing is necessary under those sections:

(a) To continue the effectiveness of a financing
statement filed before July 1, 2001; or

(b) To perfect or continue the perfection of a security
interest.

Sec. 134. 1. Sections 2 to 134, inclusive, of
this act determine the priority of conflicting claims to collateral. However if
the relative priorities of the parties were fixed before July 1, 2001, the
provisions of Article 9 which were in effect before July 1, 2001, determine
priority.

2. For purposes of subsection 1 of section 43 of this
act, the priority of a security interest that becomes enforceable under section
14 of this act dates from July 1, 2001, if the security interest is perfected
under this article as amended by the filing of a financing statement before
July 1, 2001, which would not have been effective to perfect the security
interest under the provisions of Article 9 which were in effect before that
date. This subsection does not apply to conflicting security interests each of
which is perfected by the filing of such a financing statement.

Sec. 135. 1. An issuer or a nominated person has
a security interest in a document presented under a letter of credit and any
identifiable proceeds of the collateral to the extent that the issuer or
nominated person honors or gives value for the presentation.

2. As long as and to the extent that an issuer or a
nominated person has not been reimbursed or has not otherwise recovered the
value given with respect to a security interest in a document under subsection
1, the security interest continues and is subject to Article 9, but:

(a) A security agreement is not necessary to make the
security interest enforceable under paragraph (c) of subsection 2 of section 14
of this act;

(b) If the document is presented in a medium other than
a written or other tangible medium, the security interest is perfected; and

(c) If the document is presented in a written or other
tangible medium and is not a certificated security, chattel paper, a document
of title, an instrument, or a letter of credit, so long as the debtor does not
have possession of the document, the security interest is perfected and has
priority over a conflicting security interest in the document.

Sec.
136. NRS 104.1105 is hereby amended to read as follows:

104.1105 1. Except as otherwise provided
in this section, when a transaction bears a reasonable relation to this state
and also to another state or nation, the parties may agree that the law of this
state or of such other state or nation governs their rights and duties. Failing
such agreement, this chapter applies to transactions bearing an appropriate
relation to this state.

2. Where one of the following
provisions of this chapter specifies the applicable law, that provision governs
and a contrary agreement is effective only to the extent permitted by the law
(including the conflict of laws rules) so specified:

Rights of
creditors against sold goods. NRS 104.2402.

Applicability of
the article on leases. NRS 104A.2105 and 104A.2106.

Applicability of
the article on bank deposits and collections. NRS 104.4102.

Letters of
credit. NRS 104.5116.

Applicability of
the article on investment securities. NRS 104.8110.

[Perfection
provisions of the article on secured transactions. NRS 104.9103.]

Law governing perfection, the effect of
perfection or nonperfection, and the priority of security interests. Sections
22 to 28, inclusive, of this act.

Governing law in
the article on funds transfers. NRS 104A.4507.

Sec. 137. NRS 104.1110
is hereby amended to read as follows:

104.1110 1. Transactions
validly entered into before March 1, 1967, and the rights, duties and interests
flowing from them remain valid thereafter and may be terminated, completed,
consummated or enforced as required or permitted by any statute or other law
amended or repealed by this chapter as though such repeal or amendment had not
occurred.

2. [Transactions validly
entered into after March 1, 1967, and before July 1, 1975, which were subject
to the provisions of this chapter before July 1, 1975, and which would be
subject to the provisions of this chapter as amended effective July 1, 1975, if
they had been entered into after July 1, 1975, and the rights, duties and
interests flowing from such transactions remain valid after July 1, 1975, and
may be terminated, completed, consummated or enforced as required or permitted
by this chapter as amended effective July 1, 1975. Security interests arising
out of such transactions which are perfected on July 1, 1975, shall remain
perfected until they lapse as provided by this chapter as amended effective
July 1, 1975, and may be continued as permitted by this chapter as amended
effective July 1, 1975, except as stated in NRS 104.902.

3.] A transaction arising out of or
associated with a letter of credit that was issued before October 1, 1997, and
the rights, obligations and interests flowing from that transaction are
governed by the former provisions of this chapter as if the amendment effective
October 1, 1997, had not occurred, and may be terminated, completed,
consummated or enforced under those former provisions.

[4.]3. Rights and obligations
that arose after March 1, 1967, and before October 1, 1991, under NRS 104.6101
to 104.6111, inclusive, Uniform Commercial Code-Bulk
Transfers, remain valid and may be enforced as though those sections had not
been repealed.

[5. If a security
interest in a security governed by NRS 104.8101 to 104.8511, inclusive, is
perfected before October 1, 1997, and the action by which the security interest
was perfected would suffice to perfect a security interest under this chapter
as amended effective on that date, no further action is required to continue
perfection. If a security interest in a security is perfected before October 1,
1997, but the action by which the security interest was perfected would not
suffice to perfect a security interest under this chapter as amended effective
on that date, the security interest remains perfected for a period of 4 months
after that date and remains perfected thereafter if appropriate action to
perfect it under this chapter as so amended is taken within that period. If a
security interest is perfected before October 1, 1997, and the security
interest can be perfected by filing under this chapter as amended effective on
that date, a financing statement signed by the secured party instead of the
debtor may be filed within that period to continue perfection or thereafter to
perfect.]

Sec.
138. NRS 104.1201 is hereby amended to read as follows:

104.1201 Subject to
additional definitions contained in the subsequent articles of this chapter
which are applicable to specific articles or parts thereof, and unless the
context otherwise requires, in this chapter:

1. “Action” in the sense of a
judicial proceeding includes recoupment, counterclaim, setoff, suit in equity
and any other proceedings in which rights are determined.

2. “Aggrieved party” means a
party entitled to resort to a remedy.

3. “Agreement” means the
bargain of the parties in fact as found in their language or by implication
from other circumstances including course of dealing or usage of trade or course
of performance as provided in this chapter (NRS 104.1205 and 104.2208). Whether
an agreement has legal consequences is determined by the
provisions of this chapter, if applicable; otherwise by the law of contracts
(NRS 104.1103).

consequences is determined by the
provisions of this chapter, if applicable; otherwise by the law of contracts
(NRS 104.1103). (Compare “contract.”)

4. “Bank” means any person
engaged in the business of banking.

5. “Bearer” means the person
in possession of an instrument, document of title, or security payable to
bearer or endorsed in blank.

6. “Bill of lading” means a
document evidencing the receipt of goods for shipment issued by a person
engaged in the business of transporting or forwarding goods, and includes an
airbill. “Airbill” means a document serving for air transportation as a bill of
lading does for marine or rail transportation, and includes an air consignment
note or air waybill.

7. “Branch” includes a
separately incorporated foreign branch of a bank.

8. “Burden of establishing” a
fact means the burden of persuading the triers of fact that the existence of
the fact is more probable than its nonexistence.

9. “Buyer in ordinary course
of business” means a person [who]that buys goods in good faith ,[and]
without knowledge that the sale [to him is in violation of the ownership rights or security
interest of a third party]violates the rights of another person in the
goods [buys in], and in the ordinary course from a person , other than a pawnbroker, in
the business of selling goods of that kind .[but does not include a
pawnbroker. All persons who sell minerals or the like (including oil and gas)
at wellhead or minehead shall be deemed to be persons]A person buys goods in the ordinary
course if the sale to him comports with the usual or customary practices in the
kind of business in which the seller is engaged or with the seller’s own usual
or customary practices. A person that sells oil, gas, or other minerals at the
wellhead or minehead is in the business of selling goods of that
kind. [“Buying” may be]A buyer in ordinary course of business may buy for
cash or by exchange of other property or on secured or unsecured credit and [includes
receiving]may
acquire goods or documents of title under a preexisting contract
for sale .[but
does not include a transfer in bulk or as security for or in total or partial
satisfaction of a money debt.] Only a buyer that takes possession of the goods or has a
right to recover the goods from the seller under Article 2 may be a buyer in
ordinary course of business. A person that acquires goods in a transfer in bulk
or as security for or in total or partial satisfaction of a money debt is not a
buyer in ordinary course of business.

10. A term or clause is
“conspicuous” when it is so written that a reasonable person against whom it is
to operate ought to have noticed it. A printed heading in capitals (as:
NONNEGOTIABLE BILL OF LADING) is “conspicuous.” Language in the body of a form
is “conspicuous” if it is in larger or other contrasting type or color. But in
a telegram any stated term is “conspicuous.” Whether a term or clause is
“conspicuous” or not is for decision by the court.

11. “Contract” means the
total legal obligation which results from the parties’ agreement as affected by
this chapter and any other applicable rules of law. (Compare “agreement.”)

12. “Creditor” includes a
general creditor, a secured creditor, a lien creditor and any representative of
creditors, including an assignee for the benefit of creditors, a trustee in
bankruptcy, a receiver in equity and an executor or administrator of an
insolvent debtor’s or assignor’s estate.

13. “Defendant” includes a
person in the position of defendant in a cross-action or counterclaim.

15. “Document of title”
includes bill of lading, dock warrant, dock receipt, warehouse receipt or order
for the delivery of goods, and also any other document which in the regular
course of business or financing is treated as adequately evidencing that the
person in possession of it is entitled to receive, hold and dispose of the
document and the goods it covers. To be a document of title a document must
purport to be issued by or addressed to a bailee and purport to cover goods in
the bailee’s possession which are either identified or are fungible portions of
an identified mass.

16. “Fault” means wrongful
act, omission or breach.

17. “Fungible” with respect
to goods or securities means goods or securities of which any unit is, by
nature or usage of trade, the equivalent of any other like unit. Goods which
are not fungible shall be deemed fungible for the purposes of this chapter to
the extent that under a particular agreement or document unlike units are
treated as equivalents.

18. “Genuine” means free of
forgery or counterfeiting.

19. “Good faith” means
honesty in fact in the conduct or transaction concerned.

20. “Holder” with respect to
a negotiable instrument means the person in possession if the instrument is
payable to bearer or, in the case of an instrument payable to an identified
person, if the identified person is in possession. “Holder” with respect to a
document of title means the person in possession if the goods are deliverable
to bearer or to the order of the person in possession.

21. To “honor” is to pay or
to accept and pay, or where a credit so engages to purchase or discount a draft
complying with the terms of the credit.

22. “Insolvency proceedings”
includes any assignment for the benefit of creditors or other proceedings
intended to liquidate or rehabilitate the estate of the person involved.

23. A person is “insolvent”
who either has ceased to pay his debts in the ordinary course of business or
cannot pay his debts as they become due or is insolvent within the meaning of
the federal bankruptcy law.

24. “Money” means a medium of
exchange authorized or adopted by a domestic or foreign government and includes
a monetary unit of account established by an intergovernmental organization or
by agreement between two or more nations.

25. A person has “notice” of
a fact when:

(a) He has actual knowledge of
it;

(b) He has received a notice
or notification of it; or

(c) From all the facts and
circumstances known to him at the time in question he has reason to know that
it exists.

A person “knows” or has
“knowledge” of a fact when he has actual knowledge of it. “Discover” or “learn”
or a word or phrase of similar import refers to knowledge rather than to reason
to know. The time and circumstances under which a notice or notification may
cease to be effective are not determined by this chapter.

26. A person “notifies” or
“gives” a notice or notification to another by taking such steps as may be
reasonably required to inform the other in ordinary course whether or not such
other actually comes to know of it. A person “receives” a notice or
notification when:

(a) It comes to his attention;
or

(b) It is delivered at the
place of business through which the contract was made or at any other place
held out by him as the place for receipt of such communications.

27. Notice, knowledge or a
notice or notification received by an organization is effective for a
particular transaction from the time when it is brought to the attention of the
person conducting that transaction, and in any event from the time when it
would have been brought to his attention if the organization had exercised due
diligence. An organization exercises due diligence if it maintains reasonable
routines for communicating significant information to the person conducting the
transaction and there is reasonable compliance with the routines. Due diligence
does not require a person acting for the organization to communicate
information unless such communication is part of his regular duties or unless
he has reason to know of the transaction and that the transaction would be
materially affected by the information.

28. “Organization” includes a
corporation, government or governmental subdivision or agency, business trust,
estate, trust, partnership or association, two or more persons having a joint
or common interest, or any other legal or commercial entity.

29. “Party,” as distinct from
“third party,” means a person who has engaged in a transaction or made an
agreement within this chapter or chapter 104A of NRS.

30. “Presumption” or
“presumed” means that the trier of fact must find the existence of the fact
presumed unless and until evidence is introduced which would support a finding
of its nonexistence.

33. “Remedy” means any
remedial right to which an aggrieved party is entitled with or without resort
to a tribunal.

34. “Representative” includes
an agent, an officer of a corporation or association, and a trustee, executor
or administrator of an estate, or any other person empowered to act for
another.

35. “Rights” includes
remedies.

36. “Security interest” means
an interest in personal property or fixtures which secures payment or
performance of an obligation. [The retention or reservation of title by a seller of goods
notwithstanding shipment or delivery to the buyer (NRS 104.2401) is limited in
effect to a reservation of a “security interest.”] The
term also includes any interest of a consignor and a buyer of
accounts , [or] chattel paper [which] , a payment intangible or a promissory
note in a transaction that is subject to [article] Article 9.

buyer of accounts ,[or]
chattel paper [which], a payment intangible or a promissory note in a transaction
that is subject to [article]Article 9. The special
property interest of a buyer of goods on identification of such goods to a
contract for sale under NRS 104.2401 is not a “security interest,” but a buyer
may also acquire a “security interest” by complying with [article 9. Unless a
consignment is intended as security, reservation of title thereunder is not a
“security interest” but a consignment is in any event subject to the provisions
on consignment sales (NRS 104.2326).] Article 9.Except as otherwise provided in NRS 104.2505, the right of a
seller or lessor of goods under Article 2 or 2A to retain or acquire possession
of the goods is not a “security interest,” but a seller or lessor may also
acquire a “security interest” by complying with Article 9. The retention or
reservation of title by a seller of goods notwithstanding shipment or delivery
to the buyer (NRS 104.2401) is limited in effect to a reservation of a
“security interest.” Whether a transaction creates a lease or security
interest is determined by the facts of each case; however, a transaction
creates a security interest if the consideration the lessee is to pay the
lessor for the right to possession and use of the goods is an obligation for
the term of the lease not subject to termination by the lessee, and:

(a) The original term of the
lease is equal to or greater than the remaining economic life of the goods;

(b) The lessee is bound to
renew the lease for the remaining economic life of the goods or is bound to become
the owner of the goods;

(c) The lessee has an option
to renew the lease for the remaining economic life of the goods for no
additional consideration or nominal additional consideration upon compliance
with the lease agreement; or

(d) The lessee has an option
to become the owner of the goods for no additional consideration or nominal
additional consideration upon compliance with the lease agreement.

37. A transaction does not
create a security interest merely because it provides that:

(a) The present value of the
consideration the lessee is obligated to pay the lessor for the right to
possession and use of the goods is substantially equal to or is greater than
the fair market value of the goods at the time the lease is entered into;

(b) The lessee assumes risk of
loss of the goods, or agrees to pay taxes, insurance, filing, recording or
registration fees, or service or maintenance costs with respect to the goods;

(c) The lessee has an option
to renew the lease or to become the owner of the goods;

(d) The lessee has an option
to renew the lease for a fixed rent that is equal to or greater than the
reasonably predictable fair market rent for the use of the goods for the term
of the renewal at the time the option is to be performed; or

(e) The lessee has an option
to become the owner of the goods for a fixed price that is equal to or greater
than the reasonably predictable fair market value of the goods at the time the
option is to be performed.

(1) When the option to
renew the lease is granted to the lessee the rent is stated to be the fair
market rent for the use of the goods for the term of the renewal determined at
the time the option is to be performed; or

(2) When the option to
become the owner of the goods is granted to the lessee the price is stated to
be the fair market value of the goods determined at the time the option is to
be performed.

Additional consideration is
nominal if it is less than the lessee’s reasonably predictable cost of
performing under the lease agreement if the option is not exercised.

(b) “Reasonably predictable”
and “remaining economic life of the goods” are to be determined with reference
to the facts and circumstances at the time the transaction is entered into.

(c) “Present value” means the
amount as of a date certain of one or more sums payable in the future,
discounted to the date certain. The discount is determined by the interest rate
specified by the parties if the rate is not manifestly unreasonable at the time
the transaction is entered into; otherwise, the discount is determined by a
commercially reasonable rate that takes into account the facts and
circumstances of each case at the time the transaction was entered into.

39. “Send” in connection with
any writing or notice means to deposit in the mail or deliver for transmission
by any other usual means of communication with postage or cost of transmission
provided for and properly addressed and in the case of an instrument to an
address specified thereon or otherwise agreed, or if there be none to any address
reasonable under the circumstances. The receipt of any writing or notice within
the time at which it would have arrived if properly sent has the effect of a
proper sending.

40. “Signed” includes any
symbol executed or adopted by a party with present intention to authenticate a
writing.

41. “Surety” includes
guarantor.

42. “Telegram” includes a
message transmitted by radio, teletype, cable, any mechanical method of
transmission, or the like.

43. “Term” means that portion
of an agreement which relates to a particular matter.

44. “Unauthorized” signature
means one made without actual, implied or apparent authority and includes a
forgery.

45. Except as otherwise
provided with respect to negotiable instruments and bank collections (NRS
104.3303, 104.4210 and 104.4211) a person gives “value” for rights if he
acquires them:

(a) In return for a binding
commitment to extend credit or for the extension of immediately available
credit whether or not drawn upon and whether or not a charge-back is provided
for in the event of difficulties in collection;

(b) As security for or in
total or partial satisfaction of a preexisting claim;

(c) By accepting delivery
pursuant to a preexisting contract for purchase; or

(d) Generally, in return for
any consideration sufficient to support a simple contract.

46. “Warehouse receipt” means
a receipt issued by a person engaged in the business of storing goods for hire.

47. “Written” or “writing”
includes printing, typewriting or any other intentional reduction to tangible
form.

Sec.
139. NRS 104.1206 is hereby amended to read as follows:

104.1206 1. Except in the
cases described in subsection 2 of this section a contract for the sale of
personal property is not enforceable by way of action or defense beyond $5,000
in amount or value of remedy unless there is some writing which indicates that
a contract for sale has been made between the parties at a defined or stated
price, reasonably identifies the subject matter, and is signed by the party
against whom enforcement is sought or by his authorized agent.

2. Subsection 1 of this
section does not apply to contracts for the sale of goods (NRS 104.2201) nor of
securities (NRS 104.8113) nor to security agreements [(NRS 104.9203).] (section 14 of this act).

Sec.
140. NRS 104.2103 is hereby amended to read as follows:

104.2103 1. In this article
unless the context otherwise requires:

(a) “Buyer” means a person who
buys or contracts to buy goods.

(b) “Good faith” in the case
of a merchant means honesty in fact and the observance of reasonable commercial
standards of fair dealing in the trade.

(c) “Receipt” of goods means
taking physical possession of them.

(d) “Seller” means a person
who sells or contracts to sell goods.

2. Other definitions applying
to this article or to specified parts thereof, and the sections in which they
appear are:

4. In addition article 1
contains general definitions and principles of construction and interpretation
applicable throughout this article.

Sec.
141. NRS 104.2210 is hereby amended to read as follows:

104.2210 1. A party may
perform his duty through a delegate unless otherwise agreed or unless the other
party has a substantial interest in having his original promisor perform or
control the acts required by the contract. No delegation of performance
relieves the party delegating of any duty to perform or any liability for
breach.

2. [Unless]Except as otherwise provided in
section 69 of this act, unless otherwise agreed , all rights of either
seller or buyer can be assigned except where the assignment would materially
change the duty of the other party, or increase materially the burden or risk
imposed on him by his contract, or impair materially his chance of obtaining
return performance. A right to damages for breach of the whole contract or a
right arising out of the assignor’s due performance of his entire obligation
can be assigned despite agreement otherwise.

3. Unless the circumstances
indicate the contrary a prohibition of assignment of “the contract” is to be
construed as barring only the delegation to the assignee of the assignor’s
performance.

4. An assignment of “the
contract” or of “all my rights under the contract” or an assignment in similar
general terms is an assignment of rights and unless the language or the
circumstances (as in an assignment for security) indicate the contrary, it is a
delegation of performance of the duties of the assignor and its acceptance by
the assignee constitutes a promise by him to perform those duties. This promise
is enforceable by either the assignor or the other party to the original
contract.

5. The other party may treat
any assignment which delegates performance as creating reasonable grounds for
insecurity and may without prejudice to his rights against the assignor demand
assurances from the assignee (NRS 104.2609).

Sec.
142. NRS 104.2326 is hereby amended to read as follows:

104.2326 1. Unless otherwise
agreed, if delivered goods may be returned by the buyer even though they
conform to the contract, the transaction is:

(a) A “sale on approval” if
the goods are delivered primarily for use; and

(b) A “sale or return” if the
goods are delivered primarily for resale.

2. [Except as provided in
subsection 3, goods]Goods held on approval are not subject to the
claims of the buyer’s creditors until acceptance; goods held on sale or return
are subject to such claims while in the buyer’s possession.

3. [Where goods are delivered
to a person for sale and such person maintains a place of business at which he
deals in goods of the kind involved, under a name other than the name of the
person making delivery, then with respect to claims of creditors of the person
conducting the business the goods are deemed to be on sale or return. The
provisions of this subsection are applicable even though an agreement purports
to reserve title to the person making delivery until payment or resale or uses
such words as “on consignment” or “on memorandum.” However, this subsection is
not applicable if the person making delivery:

(a) Complies with an applicable law providing for a
consignor’s interest or the like to be evidenced by a sign; or

(b) Establishes that the person conducting the business is
generally known by his creditors to be substantially engaged in selling the
goods of others; or

(c) Complies with the filing provisions of the article on
secured transactions (article 9).

4.] Any “or return” term of a contract
for sale is to be treated as a separate contract for sale within the statute of
frauds section of this article (NRS 104.2201) and as contradicting the sale
aspect of the contract within the provisions of this article on parol or
extrinsic evidence (NRS 104.2202).

Sec.
143. NRS 104.2502 is hereby amended to read as follows:

104.2502 1. Subject to subsection
2 and even though the goods have not been shipped a buyer who has paid a part
or all of the price of goods in which he has a special property under the
provisions of the immediately preceding section may on making and keeping good
a tender of any unpaid portion of their price recover them from the seller if [the] :

(a) In the case of goods bought for personal, family or
household purposes, the seller repudiates or fails to deliver as required by
the contract; or

(b) In all cases, the seller becomes
insolvent within 10 days after receipt of the first installment on their price.

2. If the identification
creating his special property has been made by the buyer he acquires the right
to recover the goods only if they conform to the contract for sale.

Sec.
144. NRS 104.2716 is hereby amended to read as follows:

104.2716 1. Specific
performance may be decreed where the goods are unique or in other proper
circumstances.

2. The decree for specific
performance may include such terms and conditions as to payment of the price,
damages or other relief as the court may deem just.

3. The buyer has a right of
replevin for goods identified to the contract if after reasonable effort he is
unable to effect cover for such goods or the circumstances reasonably indicate
that such effort will be unavailing or if the goods have been shipped under
reservation and satisfaction of the security interest in them has been made or
tendered. In the case of goods
bought for personal, family or household purposes, the buyer’s right of
replevin vests upon acquisition of a
special property, even if the seller had not then repudiated or failed to
deliver.

upon acquisition of a special property, even if the seller
had not then repudiated or failed to deliver.

Sec.
145. NRS 104.4210 is hereby amended to read as follows:

104.4210 1. A collecting
bank has a security interest in an item and any accompanying documents or the
proceeds of either:

(a) In case of an item
deposited in an account to the extent to which credit given for the item has
been withdrawn or applied;

(b) In case of an item for
which it has given credit available for withdrawal as of right, to the extent
of the credit given, whether or not the credit is drawn upon or there is a
right of charge-back; or

(c) If it makes an advance on
or against the item.

2. If credit given for
several items received at one time or pursuant to a single agreement is
withdrawn or applied in part the security interest remains upon all the items,
any accompanying documents or the proceeds of either. For the purpose of this
section, credits first given are first withdrawn.

3. Receipt by a collecting
bank of a final settlement for an item is a realization on its security
interest in the item, accompanying documents, and proceeds. To the extent and
so long as the bank does not receive final settlement for the item or give up
possession of the item or accompanying documents for purposes other than
collection, the security interest continues and is subject to the provisions of
[article]Article 9 except that:

(a) No security agreement is
necessary to make the security interest enforceable [(paragraph (a) of
subsection 1 of NRS 104.9203);] subparagraph (1) of paragraph (c) of subsection 2 of
section 14 of this act;

(b) No filing is required to
perfect the security interest; and

(c) The security interest has
priority over conflicting perfected security interests in the item,
accompanying documents, or proceeds.

Sec.
146. NRS 104.7503 is hereby amended to read as follows:

104.7503 1. A document of
title confers no right in goods against a person who before issuance of the
document had a legal interest or a perfected security interest in them and who
neither:

(a) Delivered or entrusted
them or any document of title covering them to the bailor or his nominee with
actual or apparent authority to ship, store or sell or with power to obtain
delivery under this article (NRS 104.7403) or with power of disposition under
this chapter (NRS 104.2403 and [104.9307)] section 41 of this act) or other statute or
rule of law; nor

(b) Acquiesced in the
procurement by the bailor or his nominee of any document of title.

2. Title to goods based upon
an unaccepted delivery order is subject to the rights of anyone to whom a
negotiable warehouse receipt or bill of lading covering the goods has been duly
negotiated. Such a title may be defeated under the next section to the same
extent as the rights of the issuer or a transferee from the issuer.

3. Title to goods based upon
a bill of lading issued to a freight forwarder is subject to the rights of
anyone to whom a bill issued by the freight forwarder is duly negotiated; but
delivery by the carrier in accordance with part 4 of this article pursuant to
its own bill of lading discharges the carrier’s obligation to deliver.

104.8103 1. A share or
similar equity interest issued by a corporation, business trust, joint stock
company or similar entity is a security.

2. An investment company
security is a security. “Investment company security” means a share or similar
equity interest issued by an entity that is registered as an investment company
under the federal investment company laws, an interest in a unit investment
trust that is so registered or a face-amount certificate issued by a
face-amount certificate company that is so registered. The term does not
include an insurance policy or endowment policy or annuity contract issued by
an insurance company.

3. An interest in a
partnership or limited-liability company is not a security unless it is dealt
in or traded on securities exchanges or in securities markets, its terms
expressly provide that it is a security governed by this article, or it is an
investment company security. However, an interest in a partnership or
limited-liability company is a financial asset if it is held in a securities
account.

4. A writing that is a
security certificate is governed by this article and not by article 3, even
though it also meets the requirements of that article. However, a negotiable
instrument governed by article 3 is a financial asset if it is held in a
securities account.

5. An option or similar
obligation issued by a clearing corporation to its participants is not a
security, but is a financial asset.

6. A commodity contract, as
defined in [NRS 104.9115,]paragraph (o) of subsection 1 of section 3 of this act is
not a security or a financial asset.

Sec.
148. NRS 104.8106 is hereby amended to read as follows:

104.8106 1. A purchaser has
“control” of a certificated security in bearer form if it is delivered to him.

2. A purchaser has “control”
of a certificated security in registered form if it is delivered to him and:

(a) The certificate is
endorsed to him or in blank by an effective endorsement; or

(b) The certificate is
registered in his name, upon original issue or registration of transfer by the
issuer.

3. A purchaser has “control”
of an uncertificated security if:

(a) It is delivered to him; or

(b) The issuer has agreed that
it will comply with instructions originated by him without further consent by
the registered owner.

4. A purchaser has “control”
of a security entitlement if:

(a) He becomes the entitlement
holder; [or]

(b) The securities
intermediary has agreed that it will comply with entitlement orders originated
by him without further consent by the entitlement holder[.] ; or

(c) Another person has control of the security
entitlement on his behalf or, having previously acquired control of the
security entitlement, acknowledges that it has control on his behalf.

5. If an interest in a
security entitlement is granted by the entitlement holder to the entitlement
holder’s own securities intermediary, the securities intermediary has control.

6. A purchaser who has
satisfied the requirements of [paragraph (b) of] subsection 3 or [paragraph
(b) of subsection] 4 has control even if the registered
owner in the case of [paragraph (b) of] subsection 3 or the
entitlement holder in the case of [paragraph (b) of]
subsection 4 retains the right to make substitutions for the uncertificated
security or security entitlement, originate instructions or entitlement orders
to the issuer or securities intermediary or otherwise deal with the uncertificated
security or security entitlement.

7. An issuer or a securities
intermediary may not enter into an agreement of the kind described in paragraph
(b) of subsection 3 or paragraph (b) of subsection 4 without the consent of the
registered owner or entitlement holder, but an issuer or a securities
intermediary is not required to enter into such an agreement even if the
registered owner or entitlement holder so directs. An issuer or securities
intermediary that has entered into such an agreement is not required to confirm
the existence of the agreement to another party unless requested to do so by
the registered owner or entitlement holder.

Sec.
149. NRS 104.8110 is hereby amended to read as follows:

104.8110 1. The local law of
the issuer’s jurisdiction, as specified in subsection 4, governs:

(a) The validity of a
security;

(b) The rights and duties of
the issuer with respect to registration of transfer;

(c) The effectiveness of
registration of transfer by the issuer;

(d) Whether the issuer owes
any duties to an adverse claimant to a security; and

(e) Whether an adverse claim
can be asserted against a person to whom transfer of a certificated or
uncertificated security is registered or a person who obtains control of an
uncertificated security.

2. The local law of the
securities intermediary’s jurisdiction, as specified in subsection 5, governs:

(a) Acquisition of a security
entitlement from the securities intermediary;

(b) The rights and duties of
the securities intermediary and entitlement holder arising out of a security
entitlement;

(c) Whether the securities
intermediary owes any duties to an adverse claimant to a security entitlement;
and

(d) Whether an adverse claim
can be asserted against a person who acquires a security entitlement from the
securities intermediary or a person who purchases a security entitlement or
interest therein from an entitlement holder.

3. The local law of the
jurisdiction in which a security certificate is located at the time of delivery
governs whether an adverse claim can be asserted against a person to whom the
security certificate is delivered.

4. “Issuer’s jurisdiction”
means the jurisdiction under which the issuer of the security is organized or,
if permitted by the law of that jurisdiction, the law of another jurisdiction
specified by the issuer. An issuer organized under the law of this state may
specify the law of another jurisdiction as the law governing the matters
specified in paragraphs (b) to (e), inclusive, of subsection 1.

5. The following rules
determine a “securities intermediary’s jurisdiction” for purposes of this
section:

(a) If an agreement between
the securities intermediary and its entitlement holder [specifies that it is
governed by the law of a particular jurisdiction,]expressly provides the securities
intermediary’s jurisdiction for purposes of this part, this article or the
Uniform Commercial Code, that jurisdiction is the securities
intermediary’s jurisdiction.

(b) If paragraph (a) does not apply and an agreement between the
securities intermediary and its entitlement holder governing the securities
account expressly provides that the agreement is governed by the law of a
particular jurisdiction, that jurisdiction is the securities intermediary’s
jurisdiction.

(c) If neither paragraph (a) nor paragraph (b) applies and
an agreement between the securities intermediary and its entitlement holder [does
not specify the governing law as provided in paragraph (a), but expressly
specifies]governing
the securities account expressly provides that the securities
account is maintained at an office in a particular jurisdiction, that
jurisdiction is the securities intermediary’s jurisdiction.

[(c) If an agreement
between the securities intermediary and its entitlement holder does not specify
a jurisdiction as provided in paragraph (a) or (b),]

(d) If neither paragraph (a) nor paragraph (b) nor
paragraph (c) applies, the securities intermediary’s jurisdiction
is the jurisdiction in which [is located] the office identified in an
account statement as the office serving the entitlement holder’s account[.] is located.

[(d) If an agreement
between the securities intermediary and its entitlement holder does not specify
a jurisdiction as provided in paragraph (a) or (b) and an account statement
does not identify an office serving the entitlement holder’s account as
provided in paragraph (c),]

(e) If none of the preceding paragraphs applies, the
securities intermediary’s jurisdiction is the jurisdiction in which its chief
executive office is located.

6. A securities
intermediary’s jurisdiction is not determined by the physical location of
certificates representing financial assets, or by the jurisdiction in which is
organized the issuer of the financial asset with respect to which an
entitlement holder has a security entitlement or by the location of facilities
for data processing or other record keeping concerning the account.

Sec.
150. NRS 104.8301 is hereby amended to read as follows:

104.8301 1. Delivery of a
certificated security to a purchaser occurs when:

(a) The purchaser acquires
possession of the security certificate;

(b) Another person, other than
a securities intermediary, acquires possession of the security certificate on
behalf of the purchaser or, having previously acquired possession of the
certificate, acknowledges that it holds for the purchaser; or

(c) A securities intermediary
acting on behalf of the purchaser acquires possession of the security
certificate, only if the certificate is in registered form and [has
been]is
registered in the name of the purchaser, payable to the order of the purchaser,
or specially endorsed to the purchaser by an

effective endorsement[.] and has not been endorsed to the
securities intermediary or in blank.

2. Delivery of an
uncertificated security to a purchaser occurs when:

(a) The issuer registers the
purchaser as the registered owner, upon original issue or registration of
transfer; or

(b) Another person, other than
a securities intermediary, becomes the registered owner of the uncertificated
security on behalf of the purchaser or, having previously become the registered
owner, acknowledges that it holds for the purchaser.

Sec.
151. NRS 104.8302 is hereby amended to read as follows:

104.8302 1. Except as
otherwise provided in subsections 2 and 3, [upon delivery] a purchaser of a
certificated or uncertificated security [to a purchaser, the
purchaser] acquires all rights in the security that the
transferor had or had power to transfer.

2. A purchaser of a limited interest
acquires rights only to the extent of the interest purchased.

3. A purchaser of a
certificated security who as a previous holder had notice of an adverse claim
does not improve its position by taking from a protected purchaser.

Sec.
152. NRS 104.8510 is hereby amended to read as follows:

104.8510 1. [An]In a case not covered by the rules
of priority in Article 9 or the rules stated in subsection 3, an action
based on an adverse claim to a financial asset or security entitlement, whether
framed in conversion, replevin, constructive trust, equitable lien or other
theory, may not be asserted against a person who purchases a security
entitlement, or an interest therein, from an entitlement holder if the
purchaser gives value, does not have notice of the adverse claim and obtains
control.

2. If an adverse claim could
not have been asserted against an entitlement holder under NRS 104.8502, the
adverse claim cannot be asserted against a person who purchases a security
entitlement, or an interest therein, from the entitlement holder.

3. In a case not covered by
the [priority rules in article 9,]rules of priority in Article 9, a
purchaser for value of a security entitlement, or an interest therein, who
obtains control has priority over a purchaser of a security entitlement, or an
interest therein, who does not obtain control. [Purchasers]Except as otherwise provided in
subsection 4, purchasers who have control rank [equally,
except that a]according to priority in time of:

(a) The purchaser’s becoming the person for whom the
securities account, in which the security entitlement is carried, is
maintained, if the purchaser obtained control under paragraph (a) of subsection
4 of NRS 104.8106;

(b) The securities intermediary’s agreement to comply
with the purchaser’s entitlement orders with respect to security entitlements
carried or to be carried in the securities account in which the security
entitlement is carried, if the purchaser obtained control under paragraph (b)
of that subsection; or

(c) If the purchaser obtained control through another
person under paragraph (c) of that subsection, the time on which priority would
be based under this subsection if the other person were the secured party.

4. A securities intermediary as purchaser
has priority over a conflicting purchaser who has control unless otherwise
agreed by the securities intermediary.

Sec.
153. NRS 104A.2103 is hereby amended to read as follows:

104A.2103 1. In this article
unless the context otherwise requires:

(a) “Buyer in ordinary course
of business” means a person who, in good faith and without knowledge that the
sale to him is in violation of the ownership, rights or security interest or
leasehold interest of a third party in the goods buys in ordinary course from a
person in the business of selling goods of that kind but does not include a
pawnbroker. “Buying” may be for cash or by exchange of other property or on
secured or unsecured credit and includes receiving goods or documents of title
under a preexisting contract for sale but does not include a transfer in bulk
or as security for or in total or partial satisfaction of a money debt.

(b) “Cancellation” occurs when
either party puts an end to the lease contract for default by the other party.

(c) “Commercial unit” means
such a unit of goods as by commercial usage is a single whole for purposes of
lease and division of which materially impairs its character or value on the
market or in use. A commercial unit may be a single article, as a machine, or a
set of articles, as a suite of furniture or a line of machinery, or a quantity,
as a gross or carload, or any other unit treated in use or in the relevant
market as a single whole.

(d) “Conforming” goods or
performance under a lease contract means goods or performance that are in
accordance with the obligations under the lease contract.

(e) “Consumer lease” means a
lease that a lessor regularly engaged in the business of leasing or selling
makes to a lessee who is a natural person and who takes under the lease
primarily for a personal, family or household purpose.

(f) “Fault” means wrongful
act, omission, breach or default.

(g) “Finance lease” means a
lease with respect to which:

(1) The lessor does not
select, manufacture or supply the goods;

(2) The lessor acquires
the goods or the right to possession and use of the goods in connection with
the lease; and

(3) One of the following occurs:

(I) The lessee
receives a copy of the contract by which the lessor acquired the goods or the
right to possession and use of the goods before signing the lease contract;

(II) The lessee’s
approval of the contract by which the lessor acquired the goods or the right to
possession and use of the goods is a condition to effectiveness of the lease
contract;

(III) The lessee,
before signing the lease contract, receives an accurate and complete statement
designating the promises and warranties, and any disclaimers of warranties,
limitations or modifications of remedies, or liquidated damages, including
those of a third party, such as the manufacturer of the goods, provided to the
lessor by the person supplying the goods in connection with or as part of the
contract by which the lessor acquired the goods or the right to possession and
use of the goods; or

(IV) If the lease is
not a consumer lease, the lessor, before the lessee signs the lease contract,
informs the lessee in writing of the identity of the person supplying the goods
to the lessor, unless the lessee has selected that person and directed the
lessor to acquire the goods or the right to possession and use of the goods
from that person, that the lessee is entitled under this article to the
promises and warranties, including those of any third party, provided to the
lessor by the person supplying the goods in connection with or as part of the
contract by which the lessor acquired the goods or the right to possession and
use of the goods, and that the lessee may communicate with the person supplying
the goods to the lessor and receive an accurate and complete statement of those
promises and warranties, including any disclaimers and limitations of them or
of remedies.

(h) “Goods” means all things
that are movable at the time of identification to the lease contract, or are
fixtures (NRS 104A.2309), but the term does not include money, documents,
instruments, accounts, chattel paper, general intangibles, or minerals or the
like, including oil and gas, before extraction. The term also includes the
unborn young of animals.

(i) “Installment lease
contract” means a lease contract that authorizes or requires the delivery of
goods in separate lots to be separately accepted, even though the lease
contract contains a clause “each delivery is a separate lease” or its
equivalent.

(j) “Lease” means a transfer
of the right to possession and use of goods for a term in return for
consideration, but a sale, including a sale on approval or a sale or return, or
retention or creation of a security interest is not a lease. Unless the context
clearly indicates otherwise, the term includes a sublease.

(k) “Lease agreement” means
the bargain, with respect to the lease, of the lessor and the lessee in fact as
found in their language or by implication from other circumstances including
course of dealing or usage of trade or course of performance as provided in
this article. Unless the context clearly indicates otherwise, the term includes
a sublease agreement.

(l) “Lease contract” means the
total legal obligation that results from the lease agreement as affected by
this article and any other applicable rules of law. Unless the context clearly
indicates otherwise, the term includes a sublease contract.

(m) “Leasehold interest” means
the interest of the lessor or the lessee under a lease contract.

(n) “Lessee” means a person
who acquires the right to possession and use of goods under a lease. Unless the
context clearly indicates otherwise, the term includes a sublessee.

(o) “Lessee in ordinary course
of business” means a person who in good faith and without knowledge that the
lease to him is in violation of the ownership rights or security interest or
leasehold interest of a third party in the goods leases in ordinary course from
a person in the business of selling or leasing goods of that kind but does not
include a pawnbroker. “Leasing” may be for cash or by exchange of other
property or on secured or unsecured credit and includes receiving goods or
documents of title under a preexisting lease contract but does not include a
transfer in bulk or as security for or in total or partial satisfaction of a
money debt.

(p) “Lessor” means a person
who transfers the right to possession and use of goods under a lease. Unless
the context clearly indicates otherwise, the term includes a sublessor.

(q) “Lessor’s residual
interest” means the lessor’s interest in the goods after expiration,
termination or cancellation of the lease contract.

(r) “Lien” means a charge
against or interest in goods to secure payment of a debt or performance of an
obligation, but the term does not include a security interest.

(s) “Lot” means a parcel or a
single article that is the subject matter of a separate lease or delivery,
whether or not it is sufficient to perform the lease contract.

(t) “Merchant lessee” means a
lessee that is a merchant with respect to goods of the kind subject to the
lease.

(u) “Present value” means the
amount as of a date certain of one or more sums payable in the future,
discounted to the date certain. The discount is determined by the interest rate
specified by the parties if the rate was not manifestly unreasonable at the
time the transaction was entered into; otherwise, the discount is determined by
a commercially reasonable rate that takes into account the facts and
circumstances of each case at the time the transaction was entered into.

(v) “Purchase” includes taking
by sale, lease, mortgage, security interest, pledge, gift or any other
voluntary transaction creating an interest in goods.

(w) “Sublease” means a lease
of goods the right to possession and use of which was acquired by the lessor as
a lessee under an existing lease.

(x) “Supplier” means a person
from whom a lessor buys or leases goods to be leased under a finance lease.

(y) “Supply contract” means a
contract under which a lessor buys or leases goods to be leased.

(z) “Termination” occurs when
either party pursuant to a power created by agreement or law puts an end to the
lease contract otherwise than for default.

2. Other definitions applying
to this article and the sections in which they appear are:

4. In addition, article 1
contains general definitions and principles of construction and interpretation
applicable throughout this article.

Sec.
154. NRS 104A.2303 is hereby amended to read as follows:

104A.2303 1. As used in this
section, “creation of a security interest” includes the sale of a lease
contract that is subject to article 9, Secured Transactions, by reason of
paragraph [(b)] (c) of subsection 1 of [NRS 104.9102.] section 10 of this act.

2. Except as otherwise
provided in [subsections 3 and 4,]subsection 3 and section 70 of this act,
a provision in a lease agreement which:

(a) Prohibits the voluntary or
involuntary transfer, including a transfer by sale, sublease, creation or
enforcement of a security interest, or attachment, levy, or other judicial
process, of an interest of a party under the lease contract or of the lessor’s
residual interest in the goods; or

(b) Makes such a transfer an
event of default,

gives rise to the rights and
remedies provided in subsection [5,]4, but a transfer that is prohibited or is an
event of default under the lease agreement is otherwise effective.

3. [A provision in a lease
agreement which prohibits the creation or enforcement of a security interest in
an interest of a party under the lease contract or in the lessor’s residual
interest in the goods, or makes such a transfer an event of default, is not
enforceable unless, and then only to the extent that, there is an actual
transfer by the lessee of the lessee’s right of possession or use of the goods
in violation of the provision or an actual delegation of a material performance
of either party to the lease contract in violation of the provision. Neither
the granting nor the enforcement of a security interest in the lessor’s
interest under the lease contract or the lessor’s residual interest in the
goods is a transfer that materially impairs the prospect of obtaining return
performance by, materially changes the duty of, or materially increases the
burden or risk imposed on, the lessee within the purview of subsection 5
unless, and then only to the extent that, there is an actual delegation of a
material performance of the lessor.

4.] A provision in a lease agreement
which prohibits a transfer of a right to damages for default with respect to
the whole lease contract or of a right to payment arising out of the
transferor’s due performance of his entire obligation, or makes such a transfer
an event of default, is not enforceable, and such a transfer is not a transfer
that materially impairs the prospect of

obtaining return performance by,
materially changes the duty of, or materially increases the burden or risk
imposed on, the other party to the lease contract within the purview of
subsection [5.] 4.

[5.] 4. Except as otherwise
provided in [subsections 3 and 4:] subsection 3 and section 70 of this
act:

(a) If a transfer is made
which is made an event of default under a lease agreement, the party to the
lease contract not making the transfer, unless that party waives the default or
otherwise agrees, has the rights and remedies described in subsection 2 of NRS
104A.2501.

(b) If paragraph (a) is not
applicable and if a transfer is made that is prohibited under a lease agreement
or materially impairs the prospect of obtaining return performance by,
materially changes the duty of, or materially increases the burden or risk
imposed on, the other party to the lease contract, unless the party not making
the transfer agrees at any time to the transfer in the lease contract or
otherwise, then, except as limited by contract, the transferor is liable to the
party not making the transfer for damages caused by the transfer to the extent
that the damages could not reasonably be prevented by the party not making the
transfer and a court having jurisdiction may grant other appropriate relief,
including cancellation of the lease contract or an injunction against the
transfer.

[6.] 5. A transfer of “the
lease” or of “all my rights under the lease,” or a transfer in similar general
terms, is a transfer of rights, and, unless the language or the circumstances,
as in a transfer for security, indicate the contrary, the transfer is a
delegation of duties by the transferor to the transferee. Acceptance by the
transferee constitutes a promise by him to perform those duties. The promise is
enforceable by either the transferor or the other party to the lease contract.

[7.] 6. Unless otherwise agreed
by the lessor and the lessee, a delegation of performance does not relieve the
transferor as against the other party of any duty to perform or of any
liability for default.

[8.] 7. In a consumer lease,
to prohibit the transfer of an interest of a party under the lease contract or
to make a transfer an event of default, the language must be specific, by a
writing, and conspicuous.

Sec.
155. NRS 104A.2307 is hereby amended to read as follows:

104A.2307 1. Except as
otherwise provided in NRS 104A.2306, a creditor of a lessee takes subject to
the lease contract.

2. Except as otherwise
provided in [subsections 3 and 4 of this section]subsection 3 and in NRS
104A.2306 and 104A.2308, a creditor of a lessor takes subject to the lease
contract unless[:

(a) The]the creditor holds a lien that attached to the
goods before the lease contract became enforceable . [;

(b) The creditor holds a security interest in the goods and
the lessee did not give value and receive delivery of the goods without
knowledge of the security interest; or

(c) The creditor holds a security interest in the goods which
was perfected (NRS 104.9303) before the lease contract became enforceable.

3. A lessee in the ordinary course of business takes the
leasehold interest free of a security interest in the goods created by the
lessor even though the security interest is
perfected (NRS 104.9303) and the lessee knows of its existence.

security interest is perfected (NRS 104.9303) and the lessee
knows of its existence.

4. A lessee other than a lessee in the ordinary course
of business takes the leasehold interest free of a security interest to the extent
that it secures future advances made after the secured party acquires knowledge
of the lease or more than 45 days after the lease contract becomes enforceable,
whichever first occurs, unless the future advances are made pursuant to a
commitment entered into without knowledge of the lease and before the
expiration of the 45-day period.]

3. Except as otherwise provided in sections 38, 42 and
44 of this act, a lessee takes a leasehold subject to a security interest held
by a creditor of the lessor.

Sec.
156. NRS 104A.2309 is hereby amended to read as follows:

104A.2309 1. In this
section:

(a) Goods are “fixtures” when
they become so related to particular real estate that an interest in them
arises under real estate law;

(b) A “fixture filing” is the
filing, in the office where a mortgage on the real estate would be filed or
recorded, of a financing statement covering goods that are or are to become
fixtures and conforming to the requirements of [subsection 5 of NRS
104.9402;]
subsections 1 and 2 of section 74 of this act;

(c) A lease is a “purchase
money lease” unless the lessee has possession or use of the goods or the right
to possession or use of the goods before the lease agreement is enforceable;

(d) A mortgage is a
“construction mortgage” to the extent it secures an obligation incurred for the
construction of an improvement on land including the acquisition cost of the
land, if the recorded writing so indicates; and

(e) “Encumbrance” includes
real estate mortgages and other liens on real estate and all other rights in
real estate that are not ownership interests.

2. Under this article a lease
may be of goods that are fixtures or may continue in goods that become
fixtures, but no lease exists under this article of ordinary building materials
incorporated into an improvement on land.

3. This article does not
prevent creation of a lease of fixtures pursuant to real estate law.

4. The perfected interest of
a lessor of fixtures has priority over a conflicting interest of an
encumbrancer or owner of the real estate if:

(a) The lease is a purchase
money lease, the conflicting interest of the encumbrancer or owner arises
before the goods become fixtures, the interest of the lessor is perfected by a
fixture filing before the goods become fixtures or within ten days thereafter,
and the lessee has an interest of record in the real estate or is in possession
of the real estate; or

(b) The interest of the lessor
is perfected by a fixture filing before the interest of the encumbrancer or
owner is of record, the lessor’s interest has priority over any conflicting
interest of a predecessor in title of the encumbrancer or owner, and the lessee
has an interest of record in the real estate or is in possession of the real
estate.

5. The interest of a lessor
of fixtures, whether or not perfected, has priority over the conflicting
interest of an encumbrancer or owner of the real estate if:

(a) The fixtures are readily
removable factory or office machines, readily removable equipment that is not
primarily used or leased for use in the operation of the real estate, or
readily removable replacements of domestic appliances that are goods subject to
a consumer lease, and before the goods become fixtures the lease contract is
enforceable;

(b) The conflicting interest
is a lien on the real estate obtained by legal or equitable proceedings after
the lease contract is enforceable;

(c) The encumbrancer or owner
has consented in writing to the lease or has disclaimed an interest in the
goods as fixtures; or

(d) The lessee has a right to
remove the goods as against the encumbrancer or owner. If the lessee’s right to
remove terminates, the priority of the interest of the lessor continues for a
reasonable time.

6. Notwithstanding paragraph
(a) of subsection 4 but otherwise subject to subsections 4 and 5, the interest
of a lessor of fixtures, including his residual interest, is subordinate to the
conflicting interest of an encumbrancer of the real estate under a construction
mortgage recorded before the goods become fixtures if the goods become fixtures
before the completion of the construction. To the extent given to refinance a
construction mortgage, the conflicting interest of an encumbrancer of the real
estate under a mortgage has this priority to the same extent as the
encumbrancer of the real estate under the construction mortgage.

7. In cases not within the
preceding subsections, priority between the interest of a lessor of fixtures,
including his residual interest, and the conflicting interest of an
encumbrancer or owner of the real estate who is not the lessee is determined by
the priority rules governing conflicting interests in real estate.

8. If the interest of a
lessor of fixtures, including his residual interest, has priority over all
conflicting interests of all owners and encumbrancers of the real estate, the
lessor or the lessee may:

(a) On default, expiration,
termination or cancellation of the lease agreement but subject to the lease
agreement and this article; or

(b) If necessary to enforce
his other rights and remedies under this article,

remove the goods from the real
estate, free and clear of all conflicting interests of all owners and
encumbrancers of the real estate, but he must reimburse any encumbrancer or
owner of the real estate who is not the lessee and who has not otherwise agreed
for the cost of repair of any physical injury, but not for any diminution in
value of the real estate caused by the absence of the goods removed or by any
necessity of replacing them. A person entitled to reimbursement may refuse
permission to remove until the party seeking removal gives adequate security
for the performance of this obligation.

9. Even though the lease
agreement does not create a security interest, the interest of a lessor of
fixtures, including his residual interest, is perfected by filing a financing
statement as a fixture filing for leased goods that are or are to become
fixtures in accordance with the relevant provisions of [the article]Article 9 on secured
transactions .[(article
9).]

105.030 1. Presentation of a
security instrument to the secretary of state or a county recorder for filing
and tender of the statutory filing fee or acceptance of the security instrument
by the secretary of state or county recorder, if the security instrument states
conspicuously on its title page: “This Instrument Grants A Security Interest By
A Public Utility” constitutes:

(a) Perfection of a security
interest created by the security instrument in any personal property, including
goods which are, or are to become, fixtures, in which a security interest may
be perfected by filing pursuant to [NRS 104.9101 to 104.9507,]sections 2 to 134, inclusive,
of this act located
in this state or in the county and owned by the public utility when the
security instrument was executed or to be acquired by the public utility after
execution of the security instrument; and

(b) Notice to all persons of
the existence of the security instrument and the interest granted therein, as
security, in any real property or fixtures thereon, or to be placed thereon,
located in this state or in the county and owned by the public utility when the
security instrument was executed or to be acquired by the public utility after
the execution of the security instrument if the security instrument is proved
or acknowledged and certified as required by law for the recording of
conveyances of real property.

2. The filed security
instrument must:

(a) Identify the property by
type, character or description if it is presently owned personal property,
including fixtures;

(b) Provide a description of
the property if it is presently owned real property; and

(c) State conspicuously on its
title page: “This Instrument Contains After-Acquired Property Provisions” if
the property is to be acquired after the execution of the security instrument.

3. A description of real or
personal property in a security instrument is sufficient, whether or not it is
specific, if it reasonably identifies what is described.

4. The provisions of [NRS
104.9101 to 104.9507,]sections 2 to 134, inclusive, of this act pertaining to
priorities and remedies apply to security interests in personal property,
including fixtures, perfected under this section.

Sec.
158. NRS 107.026 is hereby amended to read as follows:

107.026 [Notwithstanding any other
provision of law,]Except as otherwise provided in section 56 of this act, a
deed of trust given to secure a loan made to purchase the real property on
which the deed of trust is given has priority over all other liens created
against the purchaser before he acquires title to the real property.

Sec.
159. NRS 108.4773 is hereby amended to read as follows:

108.4773 1. Any person who
has a security interest in the personal property perfected pursuant to [NRS
104.901 to 104.9507,]sections 2 to 134, inclusive, of this act may claim the
personal property which is subject to the security interest and to the lien for
storage charges by paying the amount due, as specified in the preliminary
notice of the lien, for the storage of the property, if no declaration in
opposition to the sale to satisfy the lien has been executed and returned by
the occupant to the owner.

2. Upon payment of the total
amount due pursuant to this section, the owner shall deliver the personal
property subject to the security interest to the person paying the amount of
the owner’s lien. The owner is not liable to any person for any action taken
pursuant to this section if the owner complied with the provisions of NRS
108.473 to 108.4783, inclusive.

Sec.
160. NRS 108.831 is hereby amended to read as follows:

108.831 1. If a notice of
federal lien, a refiling of a notice of federal lien, or a notice of revocation
of any certificate described in subsection 2 is presented to the filing officer
who is:

(a) The secretary of state, he
shall cause the notice to be marked, held and indexed in accordance with the
provisions of [subsection 4 of NRS 104.9403]section 91 of this act as
if the notice were a financing statement within the meaning of the Uniform
Commercial Code.

(b) Any other officer
described in NRS 108.827, he shall endorse thereon his identification and the
date and time of receipt and forthwith file it alphabetically or enter it in an
alphabetical index showing the name of the person named in the notice and the
date of receipt.

2. If a certificate of
release, nonattachment, discharge or subordination of any federal lien is
presented to the secretary of state for filing he shall:

(a) Cause a certificate of
release or nonattachment to be marked, held and indexed as if the certificate
were a termination statement within the meaning of the Uniform Commercial Code,
except that the notice of lien to which the certificate relates must not be
removed from the files; and

(b) Cause a certificate of
discharge or subordination to be held, marked and indexed as if the certificate
were a release of collateral within the meaning of the Uniform Commercial Code.

3. If a refiled notice of
federal lien referred to in subsection 1 or any of the certificates or notices
referred to in subsection 2 is presented for filing with any other filing
officer specified in NRS 108.827, he shall enter the refiled notice or the
certificate with the date of filing in any alphabetical index of liens.

4. Upon request of any
person, the filing officer shall issue his certificate showing whether there is
on file, on the date and hour stated therein, any active notice of lien or
certificate or notice affecting any lien filed under NRS 108.825 to 108.837,
inclusive, naming a particular person, and if a notice or certificate is on
file, giving the date and hour of filing of each notice or certificate. The
certificate must state that it reveals active liens only. The fee for a
certificate is $15 if the statement is in the standard form prescribed by the
secretary of state and otherwise is $20. Upon request the filing officer shall
furnish a copy of any notice of federal lien or notice or certificate affecting
a federal lien for the statutory fee for copies.

Sec.
161. NRS 108.833 is hereby amended to read as follows:

108.833
1. The county recorder shall charge the standard fee for filing and indexing
each notice of lien, certificate or notice affecting the lien. No fee may be
charged for recording the release of any federal tax lien which was filed
before March 24, 1967.

2.
The secretary of state shall:

(a)
Charge for filing and indexing each notice of federal lien, certificate or
notice affecting the lien, [a fee of $20.]
or a search or copy relating to the lien, any one or a
combination of the fees provided in section 97 of this act with respect to a
financing statement.

lien,
any one or a combination of the fees provided in section 97 of this act with
respect to a financing statement. This fee includes the subsequent recording of
a certificate of discharge, nonattachment, release or subordination of the
lien. No fee may be charged for recording the release of any federal tax lien
which was filed before March 24, 1967.

(b)
Accept, file and index all notices of federal tax liens filed on behalf of the
Federal Government without requiring payment of the fee at the time of filing.
He shall then submit [on]an invoice each month to the [district director
of] internal revenue servicefor all fees accrued during the billing period.

Sec.
162. NRS 112.220 is hereby amended to read as follows:

112.220 1. A transfer or
obligation is not voidable under paragraph (a) of subsection 1 of NRS 112.180
against a person who took in good faith and for a reasonably equivalent value
or against any subsequent transferee or obligee.

2. Except as otherwise
provided in this section, to the extent a transfer is voidable in an action by
a creditor under paragraph (a) of subsection 1 of NRS 112.210, the creditor may
recover judgment for the value of the asset transferred, as adjusted under
subsection 3 of this section, or the amount necessary to satisfy the creditor’s
claim, whichever is less. The judgment may be entered against:

(a) The first transferee of
the asset or the person for whose benefit the transfer was made; or

(b) Any subsequent transferee
other than a [good faith] transferee who took in good faith for value or
from any subsequent transferee.

3. If the judgment under
subsection 2 is based upon the value of the asset transferred, the judgment
must be for an amount equal to the value of the asset at the time of the
transfer, subject to adjustment as the equities may require.

4. Notwithstanding voidability
of a transfer or an obligation under this chapter, a [good faith]
transferee or obligee who took in
good faith is entitled, to the extent of the value given the
debtor for the transfer or obligation, to:

(a) A lien on or a right to
retain any interest in the asset transferred;

(b) Enforcement of any
obligation incurred; or

(c) A reduction in the amount
of the liability on the judgment.

5. A transfer is not voidable
under paragraph (b) of subsection 1 of NRS 112.180 or NRS 112.190 if the
transfer results from:

(a) Termination of a lease
upon default by the debtor when the termination is pursuant to the lease and
applicable law; or

(b) Enforcement of a security
interest in compliance with [NRS 104.901 to 104.9507, inclusive.] sections 2 to 134, inclusive, of this
act.

6. A transfer is not voidable
under subsection 2 of NRS 112.190:

(a) To the extent the insider
gave new value to or for the benefit of the debtor after the transfer was made
unless the new value was secured by a valid lien;

(b) If made in the ordinary
course of business or financial affairs of the debtor and the insider; or

(c) If made pursuant to a good
faith effort to rehabilitate the debtor and the transfer secured present value
given for that purpose as well as an antecedent debt of the debtor.

Sec.
163. NRS 116.3116 is hereby amended to read as follows:

116.3116 1. The association
has a lien on a unit for any assessment levied against that unit or fines
imposed against the unit’s owner from the time the assessment or fine becomes
due. Unless the declaration otherwise provides, fees, charges, late charges,
fines and interest charged pursuant to paragraphs (j), (k) and (l) of
subsection 1 of NRS 116.3102 are enforceable as assessments under this section.
If an assessment is payable in installments, the full amount of the assessment
is a lien from the time the first installment thereof becomes due.

2. A lien under this section
is prior to all other liens and encumbrances on a unit except:

(a) Liens and encumbrances
recorded before the recordation of the declaration and, in a cooperative, liens
and encumbrances which the association creates, assumes or takes subject to;

(b) A first security interest
on the unit recorded before the date on which the assessment sought to be
enforced became delinquent, or, in a cooperative, the first security interest
encumbering only the unit’s owner’s interest and perfected before the date on
which the assessment sought to be enforced became delinquent; and

(c) Liens for real estate
taxes and other governmental assessments or charges against the unit or
cooperative.

The lien is also prior to all
security interests described in paragraph (b) to the extent of the assessments
for common expenses based on the periodic budget adopted by the association
pursuant to NRS 116.3115 which would have become due in the absence of
acceleration during the 6 months immediately preceding institution of an action
to enforce the lien. This subsection does not affect the priority of mechanics’
or materialmen’s liens, or the priority of liens for other assessments made by
the association.

3. Unless the declaration
otherwise provides, if two or more associations have liens for assessments
created at any time on the same property, those liens have equal priority.

4. Recording of the
declaration constitutes record notice and perfection of the lien. No further
recordation of any claim of lien for assessment under this section is required.

5. A lien for unpaid
assessments is extinguished unless proceedings to enforce the lien are
instituted within 3 years after the full amount of the assessments becomes due.

6. This section does not
prohibit actions to recover sums for which subsection 1 creates a lien or
prohibit an association from taking a deed in lieu of foreclosure.

7. A judgment or decree in
any action brought under this section must include costs and reasonable
attorney’s fees for the prevailing party.

8. The association upon
written request shall furnish to a unit’s owner a statement setting forth the
amount of unpaid assessments against the unit. If the interest of the unit’s
owner is real estate, the statement must be in recordable form. The statement
must be furnished within 10 business days after receipt
of the request and is binding on the association, the executive board and every
unit’s owner.

after receipt of the request and
is binding on the association, the executive board and every unit’s owner.

9. In a cooperative, upon
nonpayment of an assessment on a unit, the unit’s owner may be evicted in the
same manner as provided by law in the case of an unlawful holdover by a
commercial tenant, and the lien may be foreclosed as provided by this section
or by NRS 116.31162 to 116.31168, inclusive.

10. In a cooperative where
the owner’s interest in a unit is personal property (NRS 116.1105), the
association’s lien may be foreclosed in like manner as a security interest
under [NRS 104.9101 to 104.9507, inclusive.] sections 2 to 134, inclusive, of this
act.

Sec.
164. NRS 123.230 is hereby amended to read as follows:

123.230 Aspouse may, by written power of attorney,
give to the other the complete power to sell, convey or encumber any property
held as community property or either spouse, acting alone, may manage and
control community property, whether the community property was acquired before,
on or after July 1, 1975, with the same power of disposition as the acting
spouse has over his separate property, except that:

1. Neither spouse may devise
or bequeath more than one-half of the community property.

2. Neither spouse may make a
gift of community property without the express or implied consent of the other.

3. Neither spouse may sell,
convey or encumber the community real property unless both join in the
execution of the deed or other instrument by which the real property is sold,
conveyed or encumbered, and the deed or other instrument must be acknowledged
by both.

4. Neither spouse may
purchase or contract to purchase community real property unless both join in
the transaction of purchase or in the execution of the contract to purchase.

5. Neither spouse may create
a security interest, other than a purchase money security interest as defined
in [NRS 104.9107,]section 4 of this act, in, or sell, community
household goods, furnishings or appliances unless both join in executing the
security agreement or contract of sale, if any.

6. Neither spouse may
acquire, purchase, sell, convey or encumber the assets, including real property
and goodwill, of a business where both spouses participate in its management
without the consent of the other. If only one spouse participates in
management, he may, in the ordinary course of business, acquire, purchase,
sell, convey or encumber the assets, including real property and goodwill, of
the business without the consent of the nonparticipating spouse.

Sec.
165. NRS 125B.220 is hereby amended to read as follows:

125B.220 1. Upon deposit of
any asset pursuant to NRS 125B.210 which is not money or is not readily
convertible into money, the court may, not fewer than 25 days after serving the
obligor-parent with written notice and providing an opportunity for hearing,
order the sale of the asset and deposit the proceeds of the sale with the
trustee designated by the court to receive the assets. The sale of assets must
be conducted in accordance with the provisions set forth in NRS 21.130 to
21.260, inclusive, governing the sale of property under execution.

2. When an asset ordered to
be deposited is real property, the order must be certified in accordance with
NRS 17.150 and recorded with the county recorder. The deposited real property
and the rights, benefits and liabilities attached to that property continue in
the possession of the legal owner until it becomes subject to a use or sale of
assets pursuant to this section or NRS 125B.210. The legal owner may not
transfer, encumber, hypothecate, dispose of or realize profits from the
property unless approved by the court.

3. When an asset ordered to
be deposited is personal property or fixtures including goods, documents,
instruments, general intangibles, chattel paper or accounts, the trustee shall
file a financing statement in accordance with [NRS 104.9401, 104.9402
and 104.9403.]
sections 73, 74 and 88 of this act.

4. When an asset ordered to
be deposited is a vehicle registered with the department of motor vehicles and
public safety, the trustee shall deliver to the department the certificate of
ownership of the vehicle in accordance with NRS 482.428.

Sec.
166. NRS 125B.280 is hereby amended to read as follows:

125B.280 1. The trustee
designated by the court to receive assets pursuant to NRS 125B.210, shall
return any assets to the obligor-parent when:

(a) The obligor-parent has
given the trustee notice to return assets;

(b) All payments in arrears
have been paid in full; and

(c) The obligor-parent has
made, in a timely manner, all payments of support ordered for the 12 months
immediately preceding the date notice was given to the trustee.

2. If the deposited assets
include real property, upon the satisfaction of the requirements of subsection
1, the trustee shall prepare a release and record it in the office of the
county recorder.

3. If the deposited assets
include personal property or fixtures including goods, documents, instruments,
general intangibles, chattel paper or accounts, the trustee shall, upon the
satisfaction of the requirements of subsection 1, prepare a [release]termination statement and
file it in accordance with [NRS 104.9406.] section 85 of this act.

4. If the deposited assets
include a vehicle registered with the department of motor vehicles and public
safety, the trustee shall, upon the satisfaction of the requirements of
subsection 1, deliver the certificate of ownership to the obligor-parent in
accordance with NRS 482.431.

Sec.
167. NRS 225.105 is hereby amended to read as follows:

225.105 The secretary of
state may prescribe standards for appropriate forms to be used pursuant to [NRS
104.9403 to 104.9407, inclusive,]section 93 of this act which must be accepted
by the county recorder of every county of this state at the lower rate
prescribed by those sections. The secretary of state may, by regulation,
establish the fees that must be paid to obtain copies of these forms.

Sec.
168. NRS 482.432 is hereby amended to read as follows:

482.432 Compliance with the
applicable provisions of NRS 482.423 to 482.431, inclusive, is sufficient for
the perfection and release of a security interest in a vehicle and for
exemption from the requirement of filing of a financing statement under the
provisions of [paragraph (b) of subsection 3 of NRS 104.9302.]section 32 of this act. In
all other respects the rights and duties of the debtor
and secured party are governed by the Uniform Commercial Code—Secured
Transactions and chapter 97 of NRS to the extent applicable.

duties of the debtor and secured
party are governed by the Uniform Commercial Code—Secured Transactions and
chapter 97 of NRS to the extent applicable.

Sec.
169. NRS 482.433 is hereby amended to read as follows:

482.433 NRS 482.423 to
482.432, inclusive, do not apply to a security interest in:

1. Any vehicle which
constitutes inventory held for sale; or

2. Any vehicle not required
to be registered under this chapter.

Security interests in all such
vehicles are governed by [NRS 104.9101 to 104.9507, inclusive.] sections 2 to 134, inclusive, of this
act.

Sec.
170. NRS 597.020 is hereby amended to read as follows:

597.020 1. A lease agreement
with an option to purchase which complies with the provisions of NRS 597.010 to
597.110, inclusive, is exempt from the provisions of law governing:

(a) A security interest as
defined in NRS 104.1201.

(b) A door-to-door sale is
defined in NRS 597.180.

(c) The sale of consumer goods
as defined in [NRS 104.9109.] section 3 of this act.

2. The provisions of NRS
597.010 to 597.110, inclusive, do not apply to:

(a) A lease agreement with an
option to purchase entered into primarily for business, commercial or
agricultural purposes.

(b) A lease agreement with an
option to purchase made with any governmental agency.

(c) The lease of a safe
deposit box.

(d) A lease or bailment of
personal property which is incidental to the lease of real property and which
does not provide the customer with an option to purchase the leased property.

(e) The lease of a motor
vehicle.

Sec.
171. NRS 675.300 is hereby amended to read as follows:

675.300 1. A licensee may
request that a borrower insure tangible property when offered as security for a
loan under this chapter against any substantial risk of loss, damage or
destruction for an amount not to exceed the actual value of the property and
for a term and upon conditions which are reasonable and appropriate considering
the nature of the property and the maturity and other circumstances of the
loan.

2. A licensee may require
that a borrower provide title insurance on real property offered as security
for a loan under this chapter. The title insurance must be placed through a
title insurance company authorized to do business in this state.

3. A licensee may provide,
obtain or take as security for a loan:

(a) Insurance on the life and
on the health or disability, or both, of one or more parties obligated on the
loan;

(b) Involuntary unemployment
insurance;

(c) Insurance which protects
his interest in the collateral pledged for the loan;

(d) Single interest nonfiling
insurance; or

(e) Any other credit-related
insurance approved by the commissioner,

if the insurance complies with the
applicable provisions of chapter 690A of NRS.

4. In accepting any insurance
provided by this section as security for a loan, the licensee may include the
premiums or identifiable charge as part of the principal or may deduct the
premiums or identifiable charge therefor from the proceeds of the loan, which
premium or identifiable charge must not exceed those filed with and approved by
the commissioner of insurance, and remit those premiums to the insurance
company writing the insurance, and any gain or advantage to the licensee, any
employee, officer, director, agent, affiliate or associate from the insurance
or its sale may not be considered as additional or further charge in connection
with any loan made under this chapter. Not more than one policy of life
insurance and one policy providing accident and health coverage may be written
by a licensee in connection with any loan transaction under this chapter, and a
licensee shall not require the borrower to be insured as a condition of any
loan. If the unpaid balance of the loan is prepaid in full by cash or other
thing of value, refinancing, renewal, a new loan or otherwise, the charge for any
credit life insurance and any credit accident and health insurance must be
refunded or credited as prescribed in chapter 690A of NRS. The insurance must
be written by a company authorized to conduct business in this state, and the
licensee shall not require the purchase of the insurance from any agent or
broker designated by the licensee.

5. The amount charged to a
debtor by a licensee for any type of coverage under a policy of insurance
provided by this section as security for a loan must not exceed the amount of
the premium. In the case of a single interest nonfiling policy of insurance,
the amount charged to a debtor by a licensee must not exceed the amount charged
by a county recorder for filing and releasing documents pursuant to [NRS
104.9403 and 104.9406.] section 97 of this act.

6. As used in this section,
“single interest nonfiling insurance” means a contract of insurance for which a
lender pays a predetermined fee, which affords coverage to a lender in
connection with a specific loan, and which is obtained by the lender in lieu of
perfecting a security interest pursuant to chapter 104 of NRS.

Sec. 173. The
legislative counsel shall reserve for reuse the numbers of the sections
repealed by section 172 of this act and, except as otherwise provided in this
section, in preparing the 1999 reprint of NRS, shall number the sections of
chapter 104 of NRS that are added by sections 2 to 135, inclusive, of this act,
and the internal references thereto, to correspond to the numbers assigned to
those sections of the Uniform Commercial Code by the National Conference of
Commissioners on Uniform State Laws. The legislative
counsel shall number the sections added by sections 128 to 134, inclusive, of
this act consecutively beginning with NRS 104.901.